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Occasionally, in my role as a consultant, I am approached by companies that have a plan in place for their fundraising that doesn’t involve the CEO or a member of the founding team running point on the fundraising process. From one perspective, I can understand that: VC fundraising does, from the outside, look a lot like sales, and if you have a good salesperson, why not let them do what they do best?

The issue is that while salespeople are great at sales, the VC fundraising process is very different than landing a customer. You’re trying to find an alignment between the company and a long-term partner who will have a significant amount of input into the future of your startup. And if there are discrepancies between the sales process and the deeper due diligence into the company (and there will be, because the sales team has a different long-term perspective on what success looks like), that can make the whole deal fall apart.

There are several really good reasons why, at the earliest stages of fundraising, the founding team should be running the fundraising process. In this article, I break it down and explain why it’s an awful idea to let anyone but the CEO do the fundraising.

If your CEO isn’t pitching to VCs, you’ll never raise money by Haje Jan Kamps originally published on TechCrunch

An increasing number of organizations are adopting microservices, the loosely-coupled, independently-deployable services that together make up an app. According to a 2020 O’Reilly survey, 77% of organizations had adopted microservices as of then, with 29% reporting that they were migrating or implementing a majority of their systems using microservices.

The widespread microservices adoption has spawned new problems in app development, however. According to the same O’Reilly survey, company culture and integrating with holdover systems have become major challenges in the microservices arena.

Startups have rushed in to fill the void of solutions. There’s Helios, a microservices management platform that helps developers understand how their code interacts with the rest of their apps. Vendors like OpsLevel and Temporal compete with Helios for business, offering platforms that organize microservices in a centralized portal. A newer entrant in the space is Nucleus, which aims to let devs spin up microservices architectures using a range of infrastructure, security and observability tools. Backed by Y Combinator, Nucleus has raised $2.1 million in VC money to date.

Nucleus was co-founded by Evis Drenova and Nick Zelei in 2021, after the two spent roughly seven years building infrastructure platforms both at large enterprise companies (e.g. IBM, Garmin) and startups (Skyflow, Newfront). The inspiration for Nucleus came after Drenova and Zelei realized they often had to rebuild the same platform to help developers create, test and deploy their microservices.

“We noticed that more companies were trying to move to [microservices] and break apart their monoliths but really struggled to do this well,” Drenova said via email. “Some companies that have tried to move to microservices have gotten their fingers burned because they didn’t have the right tooling, and, more importantly, the right people … We want to make it easy and reliable for companies to move to not just microservices but service-oriented architectures without having to be security, infrastructure and observability experts.”

With Nucleus, developers define microservices and deploy them on the Nucleus platform, which automatically configures aspects of their security, observability and more. Nucleus is delivered through a command-line interface designed to fit into existing developer workflows and comes with prebuilt integrations, including tools such as Hashicorp, Cloudflare and Okta.

“Nucleus is an infrastructure platform that allows you complete freedom over your code,” Drenova said. “As a developer, you can write your code in any language that you want and we support it out of the box. We don’t interfere with your business logic — one way to think about it is that we’ve built a cage you can put your code into and that cage is integrated with your infrastructure and your third-party tools and is extremely secure.”

Those are lofty promises. But to Drenova’s credit, Nucleus — whose platform is still in beta — already has “a few” early customers and eight design partners. Investors, too, were won over, with backers including Soma Capital, Y Combinator, LombardStreet Ventures and “dozens” of angels throwing capital in Nucleus’ direction.

“Nucleus is a critical piece of software. We run and manage all of your services,” Drenova added. “It’s bigger than any one developer, meaning that chief technology officers are always our buyers … Our target market is companies with 20-plus developers who are moving to a service-oriented architecture. But any company that uses services can use us.”

Nucleus is focused on organic growth at the moment, sticking with a small team of four employees including the co-founders. Drenova is considering hiring 1-2 engineers next year, but he’s leaning conservative, waiting for stronger signs of product-market fit.

“In a downturn, the playing field is more level towards early-stage companies, and while larger competitors are focused on reducing cash burn and staying alive, we’re putting the pedal to the metal and going after the opportunity,” Drenova said. “We have plenty of cash in the bank and have runway for the next few years.”

Nucleus aims to simplify the process of managing microservices by Kyle Wiggers originally published on TechCrunch

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

Let’s get right to it, shall we?

Top of mind for me this week is Tesla. I know, weird.

But really, it seems that pressure is coming from all sides these days. The company’s decision to slash prices has angered recent buyers (one only need to turn to Twitter to view the ire), shareholders are becoming more vocal about the lagging stock price (it fell more than 64% in the past year) and its facing mounting regulatory pressure over Autopilot and its so-called FSD software beta product that promises full self-driving. To be clear, Tesla vehicles are not self driving. The system is an advanced driver assistance product.

At any rate, these problems keep piling up. How much can the company take?

In the past, Tesla and its CEO Elon Musk have managed to wriggle free of criticism or concerns it was stagnating, often by showcasing a potential future product or hitting ambitious production and delivery goals.

But Tesla narrowly missed its own production and delivery guidance for the year, and Wall Street’s Q4 expectations. And shareholders, consumers and regulators seem to be tiring of this cycle. To me, this is just another indication that Tesla is starting to be viewed (and treated) more as a legacy automaker and not a whiz-bang upstart that can do no wrong.

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Micromobbin’

Rebecca Bellan was out this past week, but I still wanted to share a couple of interesting micromobbin’ stories reported by yours truly and Romain Dillet, who hails from France.

First up is Romain’s article that takes a look at Paris and its looming scooter decision that could upend the micromobility industry there. I recommend you read the entire article. Here’s a small taste.

On March 23rd, the fate of the 15,000 colorful electric scooters that currently spill across the streets of Paris could drastically change as the French capital weighs up whether or not to renew licenses for the three scooter companies currently operating in the city.

Romain gets right to the implications, which stretch far beyond Paris.

And this isn’t just going to impact Dott, Tier and Uber-affiliated Lime — the three companies that haveheld those licenses since 2020. The decision will set a precedent for the many cities around the world that have also let scooters onto their streets. If things don’t go their way, a negative decision in Paris could have a chilling effect on micromobility startups globally.

Next up is a more luxurious, high-performance scooter story. I’m talking about Bugatti, yes Bugatti, and its new electric scooter.

Bugatti, through a partnership with tech accessory company Bytech, launched a $1,200 electric scooter in 2022. The two companies paired up again for a second-generation scooter that is beefier, equipped with new features and colors, and has larger “self-repairing” tires.

The 2023 scooter is 10% larger than its predecessor and is equipped with a 36-volt/15.6Ah battery and an electric motor with a maximum output of 1,000 watts, according to the companies.

That battery and motor combo allows the scooter to handle up to an 18-degree incline, max speed of 22 miles per hour and can cover 35 miles on a single charge, according to the company. (That’s up from the 22-mile range in the previous model.)

No word yet on the pricing for this bigger second-generation model. Perhaps this is one of those “if you have to ask” moments. ;D

See ya next week!

Deal of the week

We’ve seen lots of SPACs the past two years. but what about a double SPAC? Yes, it has happened.

I’m talking about Wejo, the British automotive data exchange platform that went public in November 2021 after merging with special purpose acquisition company via Virtuoso Acquisition Corp at an implied $800 million valuation.

But what’s this? The company announced January 10 it has now agreed to merge with a SPAC created by private equity firm TKB Capital, in a deal that could raise up $100 million. And that’s money Wejo needs.

It seems that this latest SPAC is the buoy Wejo is using to keep it afloat. It’s not just that Wejo’s share price fell below $1 a share; the company is also burning through cash.

Wejo warned in November it had a $15 million cash balance, which would sustain the company for a “very short period of time.”

Wejo is about two years away from generating life-sustaining-nope-we’re-not-going-to-file-for-bankruptcy revenue. To add a little extra financial drama to the scenario, Wejo also owes Palantir millions of dollars, per an op-ed piece by Chris Bryant in Bloomberg.

This double SPAC is an odd one. I have this nagging feeling that some other failing SPACs will try this same tactic.

Other deals that got my attention this week …

Apollo Future Mobility Group agreed to buy Chinese electric vehicle maker WM Motor Holdings for $2.02 billion. The acquisition must still meet regulatory approvals.

Hystar, a green hydrogen startup based in Norway, raised $26 million in a Series B round co-led AP Ventures and Mitsubishi Corp. Other investors included Nippon Steel Trading, Belgium-based investment company Finindus, Hillhouse Investment, Trustbridge Partners, SINTEF Ventures and Firda.

Ottopia, an Israeli teleoperations company focused on the agriculture, construction, last-mile delivery, logistics and mobility industries, raised $14.5 million in its Series A funding round that attracted public transport giant ComfortDelGro as an investor. Other participants included AI Alliance Fund, MizMaa Ventures, IN Venture and Next Gear Ventures. T

Oxbotica, a startup out of England that develops software to power autonomous vehicles, raised $140 million in a Series C round that included investment from Japan’s Aioi Nissay Dowa Insurance Co. and corporate VC ENEOS Innovation Partners. Existing investors BGF, safety equipment group Halma, hospitality and recreation investor Hostplus, Kiko Ventures, the online shopping company Ocado Group, Tencent, Venture Science and automotive component maker ZF also participated.

Tianqi Lithium Corp. agreed to buy Australian lithium explorer Essential Metals Ltd in a A$136 million ($94 million) deal that is estimated to provide enough supply for around 10 million electric vehicles.

Notable reads and other tidbits

Autonomous vehicles

Aurora gives a progress report to FreightWaves.

What next for Pittsburgh’s autonomous vehicle scene?

ADAS

The National Highway Traffic Safety Administration is apparently “working really fast” on the Tesla Autopilot investigation it opened in August 2021. Speaking of pressure on Tesla, there may be even more coming after The Intercept published videos and photos of an eight-car pile-up on San Francisco’s Bay Bridge caused by a Tesla Model S. The driver claimed “Full Self-Driving” was active at the time of the crash.

Electric vehicles, batteries and charging

Lucid Group produced 7,180 of its luxury Air sedans in 2022, exceeding its previously lowered guidance for the year. Lucid adjusted its guidance last fall, stating it would produce 6,000 to 7,000 vehicles in 2022.

Nikola is officially moving its battery manufacturing from Cypress, California to its Coolidge, Arizona manufacturing facility. The move is expected to be completed early in the third quarter. Manufacturing will continue in Cypress through the second quarter.

Proterra produced its first commercial EV battery at its new factory in Greer, South Carolina. The company is calling the factory “Powered 1,” and believes it will be the largest battery manufacturing facility in the United States dedicated to electric commercial vehicles.

Tesla plans to invest about $770 million into an expansion of its factory near Austin that includes a die shop, a facility for battery cell testing and another to manufacture cathode and drive units. Tesla indicated it wants to build the new facilities this year.

Zeekr, the premium brand under Geely Holding Co., started serial production of its second model, an electric van called Zeekr 009.

People

Carvana, the online used car dealer, continues to struggle and it’s cutting workers as sales slow and it attempts to manage its $7 billion debt load.

Cruise has Nilka Thomas as its new chief human resources officer. Thomas, who most recently served in a similar position at Lyft, succeeds Arden Hoffman at Cruise. Thomas also spent 13 years at Google leading efforts focused on recruitment, D&I, employee engagement, HR governance and employee relations.

Hyzon Motors, the heavy-duty fuel cell electric vehicle supplier, appointed John Edgley as president of international operations.

Scale AI, the San Francisco–based company that uses software and people to label image, text, voice and video data for companies building machine learning algorithms, laid off 20% of its workforce. The company did not say how many people work at Scale AI. However, back in February 2022, the company told TechCrunch it employed about 450 people.

Tesla rolls into a pressure cooker, Paris mulls its scooter future, and the double SPAC arrives by Kirsten Korosec originally published on TechCrunch

Last Friday, a ton of popular Twitter clients including Tweetbot, Twitterrific, and Echofon were down. Users couldn’t log into their accounts or look at their timelines. At first, it looked like a bug in Twitter API, but radio silence from Twitter and new details indicated that the company deliberately limited access to third-party apps.

The issue

On Friday, late evening PST time, many users noticed that they could not access their third-party Twitter clients. The app makers quickly acknowledged the issue and said that they had been trying to contact the company.

A Japan-based developer noted at the time that many smaller Twitter clients were working without any glitches. Many folks in the community speculated that it could be an issue with the API or that the company is limiting access to larger clients.

The radio silence

While developers and users expected Twitter to communicate with them in some ways, the company and its new owner Elon Musk maintained radio silence about the problem. However, the Tesla CEO tweeted everything ranging from the latest Falcon Heavy launch to building transparency on Twitter by publishing the platform’s tweet recommendation code.

Internal messages on Twitter indicated that shutting down certain third-party clients was a company decision rather than a bug, The Information reported over the weekend. The report said that one project manager told the product team that the company had “started to work on comms,” but didn’t provide any timeline for official and approved communication.

Developer frustration

Since the beginning of the saga, many developers have expressed their frustrations on Twitter and Mastodon. Twitterrific-maker Craig Hockenberry posted a blog post called “The Shit Show,” in which he said “Personally, I’m done. And with a vengeance.”

Fenix developer Matteo Villa said on Twitter that he is considering pulling the client from the App Store— which is working at the time of writing — because he fears that the client might stop working at a point.

Tweetbot co-creator Paul Haddad even tried to make the app work by loading in old API keys. That trick worked for a while and some folks were able to access their accounts. However, users started to hit an API limit and the client was later suspended again.

iOS developer Mysk said on their account that Tweetbot ran into the limit of 300 posts per 15 minutes — which was applicable for old v1.1 API — for all users.

Earlier, they had built a demo client to show that Twitter’s API was working and the suspension of third-party apps was not because of a bug.

A bunch of these developers were concerned about handling refunds for folks who have subscribed to the pro or premium versions of their apps if Twitter banned third-party clients. That would also mean that their annual income would go down and they would have to build new products while making no money.

The way forward

Some developers have already shown intent of concentrating on other projects. Haddad told TechCrunch over an email that Tweetbot is concentrating on launching its Mastodon client Ivory — which is currently in a closed beta — at an accelerated pace.

He said that currently the team is focused on making the onboarding experience better, then fixing the bugs and working towards an App Store release.

Villa also released a beta version of his Mastodon client Wolly on Apple’s test platform Testflight.

For some other developers, the situation is bleak. As iOS developer Adam Demasi noted that some indie developers whose primary product was a Twitter client might face a difficult time.

Since Musk took over Twitter last year, the company has shuttered several developer-related projects including Twitter Toolbox for app discovery. Some other programs in the defunct state even if the company has not announced official shutdowns. Developers have been cautious about their Twitter development plan given that the company hasn’t explicitly communicated its plans about platform support.

These kinds of moves have undone the social network’s work over the last few years to earn back developers’ trust. Last month, Twitter’s former head of developer platforms, Amir Shevat, wrote on TechCrunch that the new management broke the trust of developers. This dubious suspension of third-party Twitter clients without any communication will not instill any confidence in the community.

Twitter’s third-party client issue is seemingly a deliberate suspension by Ivan Mehta originally published on TechCrunch

This weekend, Mayor of Paris Anne Hidalgo told Le Parisien that Parisians will get to vote whether they want to ban free-floating electric scooters or not. As I explained last week, Dott, Lime and Tier, the three scooter companies currently operating in the city, have operating licenses that are set to expire on March 23rd, 2023. And the fate of those services could have wide implications across the micromobility sector.

“If Parisians want to own their own scooter, there’s no issue. But we have a real issue with free-floating scooters. It’s not climate-friendly. Employees working for these companies are not properly treated,” Mayor of Paris told Le Parisien.

“That’s why I’m going to ask a question to Parisians in a vote that is going to take place on Sunday, April 2nd so that I can understand what they want,” she added.

Each operator currently has a fleet of 5,000 electric scooters. As the vote will occur a few days after the license expiration, it seems like scooter companies will have to remove 15,000 scooters from the streets of Paris before they know if they’re allowed to operate.

The city council is divided on electric scooters. Deputy Mayor David Belliard has been strongly against those services. He’s in charge of transportation and he’s also a green party member. He’s an important ally for Anne Hidalgo, a member of the Socialist Party.

But that doesn’t mean that everyone in the city council wants to ban electric scooters. The Mayor of Paris ultimately gets to decide whether shared scooters should be banned or not. And she has decided that… she’s not going to decide, even though she doesn’t like scooters.

“Should we move forward with free-floating scooters or not? During last year’s public hearing with Parisians, it was a polarizing topic — it’s a battle. My idea is that we should stop. But I will respect the vote of the Parisians even if they disagree with what I want,” Hidalgo told Le Parisien.

So the campaign is on. Dott, Lime and Tier are already lining up their talking points. For instance, according to them, electric scooters are a green transportation option. The reality is a bit more complex as an electric scooter is greener than an Uber ride. But Paris also has a dense metro network.

According to an Ipsos poll paid by Dott, Lime and Tier, 40% of people living in Paris are satisfied with free-floating scooters. 88% of them also think that they are here to stay. Let’s see if that opinion will be reflected in the vote results.

Here’s a joined statement from Dott, Lime and Tier:

“We welcome the decision to consult Parisians regarding the city’s shared e-scooter service, and hope to ensure its continuity over the coming months.

With more than 2 million unique riders having used the shared e-scooter service this year alone – and 700 tons of CO2 emissions avoided in 2021 by riding green in the capital – we are convinced that Parisians are aware of the role that zero emission micromobility options play in helping meet the ambitions set out in the Paris agreements at COP21.

All the employees of the three operators in the Paris area – 800 in total, all on fixed-term and permanent contracts – take note of this reprieve. Lime, Dott and Tier will remain attentive about the terms of this consultation, which seems to state that only inner city Parisian residents will be eligible to vote and those living in city’s suburbs, as well as expats and non-native residents who live in inner city Paris will not be eligible to vote.”

Paris to hold vote on shared scooters by Romain Dillet originally published on TechCrunch