Tech News

Virgin Orbit’s much-hyped launch from Cornwall, U.K. on Monday ended in failure, with the company announcing that the mission experienced an “anomaly” that prevented the rocket from reaching orbit.

The “Start Me Up” mission attracted much attention; not only was it the company’s sixth launch, it was also billed as the first-ever space flight from the United Kingdom and the first-ever orbital launch attempt from the new Spaceport Cornwall, in southeast England. (Other U.K.-based rocket companies, like Orbex and Skyrora, are racing to be the first to conduct a vertical rocket launch from U.K. soil.)

But the anomaly may prove to be a very costly mistake for the company, which has been on shaky financial ground since going public in 2021. The first miscalculation occurred shortly after the company completed its merger with special purpose acquisition company NextGen Acquisition Corp. II at the end of 2021. Virgin Orbit only garnered $228 million in gross proceeds from the merger, falling far short of the projected $483 million the company projected it would receive from the transaction.

That shortfall was followed by dwindling cash reserves. In the company’s most recent quarterly earnings report, it said that as of September 30 it had $71 million cash on hand. The company then received a $25 million injection from Richard Branson’s Virgin Group and $20 million from Virgin Investments Ltd. But even with these additional funds, it’s unclear if the company has enough financial runway without needing to seek additional capital.

The company’s previous financial projections have also raised eyebrows. While it’s not unusual for earnings presentations to contain fanciful forecasts, some of those issued by Virgin Orbit have stretched even the most ambitious imaginations. In 2021, the company estimated it would hit $2.1 billion in revenue by 2026. Given that each LauncherOne costs on average of around $12 million, that would mean the vehicle would need to fly a whopping 175 times per year. Keep in mind that SpaceX, far and away the world’s leading launch provider, just hit a record 61 annual launches last year. Virgin Orbit was essentially saying that it would be three times as successful, measured by launch cadence, than SpaceX in just five years.

This is not to say that Virgin Orbit has not had its successes. Indeed, out of the six launch attempts so far, four have been successful. That’s not a rate at which to scoff. But as is becoming more and more clear, at some point, all launch companies have to start making revenue. Otherwise it’s just burned cash, and not much to show for it.

Virgin Orbit’s botched launch highlights shaky financial future by Aria Alamalhodaei originally published on TechCrunch

Investment giant Fidelity announced today that it has acquired Shoobx, a venture-backed fintech startup, for an undisclosed amount.

Jason Furtado and Stephan Richter founded Boston-based Shoobx in 2013, according to Crunchbase. The pair went on to raise a known $10 million in funding for the company with investors such as Austin-based Scout Ventures and Steve Papa. Atlas Ventures is also a backer, according to the Wall Street Journal. All 40 of Shoobx’s employees will join Fidelity.

Shoobx is a provider of automated equity management operations and financing software to private companies “at all growth stages,” up to and including an initial public offering. Services it offers include helping companies send offer letters, grant equity to new employees, manage their cap tables and get a 409A valuation report, among other things.

On its website, Shoobx notes that it has been called “Carta on steroids” because its “capabilities rocket past what Carta can provide.” Meanwhile, Carta Crunchbase data indicates that Carta has raised $1.1 billion to date, including a massive $500 million round raised in August 2021, led by Silver Lake. At that time, the company was valued around $7.4 billion, per the same data source. So while we don’t know how much Shoobx was worth at the time of this acquisition, it’s safe to say that its valuation is likely less than that of Carta’s based on how much it has raised over time.

For its part, Fidelity said its purchase of Shoobx is a sign of its commitment to the private market “and will help to satisfy an increasing demand Fidelity sees from private companies to support them as they scale and grow.” The last time Fidelity acquired another company was in 2015, when it acquired wealth planning software company eMoney Advisor, according to a company spokesperson.

Shoobx will be folded into Fidelity’s Stock Plan Services business, which provides equity compensation plan recordkeeping and administration services to nearly 700 companies with 2.5 million plan participants, totaling over $250 billion in plan value. Stock Plan Services is part of Fidelity’s Workplace Investing division, one of the country’s leading workplace benefits providers.

According to Shoobx’s website, the two companies were partners prior to this announcement.

Fidelity makes first acquisition in 7 years, snapping up fintech Shoobx by Mary Ann Azevedo originally published on TechCrunch

AR/VR/MX took center stage at CES 2023. Automotive trends got a lot of love, as well, as did robotics and the metaverse. Heck, even pee-related gadgets had their moment to shine last week in Vegas. Another trend, however, was ever-present, if decidedly more understanded.

The last few years have been a roller coaster for the smart home. After years of hype, the cracks have begun to show for some of the major players in the space. The most prominent example of late is Amazon’s Echo division. While no doubt being set up as something of a loss leader, few expected a $5 billion a year revenue loss at this late stage.

In addition to the standard tech hype cycle, the smart home has also been cursed by a lack of interoperability. One of the technology’s most hopeful promises is an easy set up. Forget all of those expensive, time-consuming setups that require someone with contracting and electrical know-how — just plug it in, connect the app and you’re off to the races.

But in consumer electronics, the best laid plans and all that. It’s still a relatively young category, with several pain points, but at least one was seemingly easily avoided. If you’ve followed consumer tech with any frequency, you know one thing for sure: Competitors will rarely give an inch. It’s an approach that — in the past — has led to antitrust and other regulatory scrutiny. In recent years, this has manifested itself as app stores and walled gardens.

For the smart home, it’s meant a dearth of interoperability. If you’ve attempted to buy a smart home product, you’re almost certainly familiar with the limitations. Heck, there’s a decent chance you purchased a product and had to return it after finding out the hard way that it didn’t work with HomeKit, Alexa, Google Home, Samsung SmartThings or any manner of other ecosystems.

This is the promise of Matter. Announced at the tail end of 2019, the home automation standard is the purview of the Connectivity Standards Alliance (CSA). The group was founded by Amazon, Apple, Google, Comcast and the Zigbee Alliance. It operates similarly to organizations like the Bluetooth Special Interest Group and WiFi Alliance. The company list has expanded greatly, but each member gets the same single vote, from Apple, Amazon and Google on down to the smallest startup.

“Manufacturers all agree to send the same commands and all agree to do the same thing when they’ve received those commands,” Jon Harros, the CSA’s director of Certification and Testing Programs, told us in an interview at last week’s CES. “It wouldn’t matter whether the command came from one manufacturer or the other. If you’re receiving it, it will always work in the same way.”

The obvious question in all of this is: Why now? Or, more explicitly, why did this take so long? For starters, the obvious issue alluded to above that most of these big companies would really rather not work with their competitors if they can avoid it. As such, getting everyone on the same page about something like this is a bit of a cat herding scenario.

“Technically, there are a lot of different steps,” says Harros. “Number two, it was also we had to reach a level of maturity within the market and with those global players that everyone understood and recognized that having these walled gardens and having these fractured networks was actually limiting the AOT (automation of things), and that it was time to resolve that issue.”

Effectively, the big players recognized that there was less value in cutting out the competition by demanding manufacturers comply to a single ecosystem than there was in suddenly opening their own offering up to practically every third-party device manufacture by way of a group effort. It’s a remarkable bit of collaboration in an era of closed ecosystems and app stores.

“The IoT started reaching a point where it became obvious to have that reality of the billions of sensors and connected devices that we all know is possible,” says Harros. “They all have a major slice of the pie. They’re all doing very well, but the size of the pie could grow orders of magnitude. You’re now not talking about shipping millions of products, you’re talking about shipping billions.”

More than 2,000 engineers pulled from different member companies were put to work creating a software protocol that would offer cross platform functionality, and provide the sort of product security consumers demand from their smart products in 2023. The initial fruits of that work began rolling out toward the end of last year. Plenty more are still on the way.

“We’ve already had one train arrive at the station as Matter 1.0,” says Harros. “We wanted to make sure we launched on time, with all of the features and primary device types everyone wanted, straight out of the block. Before the train arrived, other trains set off behind it. There are members of the alliance that have been working on things like white goods [appliances], cameras and smart vacuums. They’re already on the way to the train station. They just haven’t arrived yet.”

One of the beauties about the implantation of a software layer is that many existing products will be backward compatible with the standard through an over the air update. Newer products, meanwhile, will carry the Matter logo, which the alliance is hoping will become as ubiquitous as the Bluetooth and WiFi logos. For older products, you’ll be able to check them against the CSA’s online database.

The organization is employing third-party laboratories to put devices through similar testing practices as the ones the FCC has in place.

We absolutely believe that — in a very short matter of time — everyone will recognize the Matter logo, so when a consumer goes to an electronics store or your local home hardware store, they’re just going to look for that logo. You know that if it has that logo, it will interoperate with something else.

Why the Matter logo was everywhere at CES 2023 by Brian Heater originally published on TechCrunch

Here’s something that seems all but a guarantee: The way we purchase expensive electronics is going to change. Years after the U.S. began moving away from the carrier-based model of phone purchases, it seems as though we’re heading toward another sort of subscription model in the form of hardware as a service.

Even with that in mind, this is a strange one — though Nothing has made breaking from orthodoxy a central tenet of its existence since day one.

As we’ve known for some time, the Phone (1) wasn’t destined for the U.S. market — at least not through any traditional means. Today, however, the London-based firm announced it is available through a far less traditional route. “The United States represents a high potential market for Nothing and so the company is seeking to better understand users’ needs,” the company said in a note sent to TechCrunch.

The “Nothing OS 1.5 Beta” is a $299 program designed to help the company get a better grip on the world’s third-largest smartphone market — one that’s been notoriously difficult to crack. The price includes a Nothing phone that’s yours to keep, even after the program runs its course at the end of June.

Nothing notes:

Please note, the Phone (1)’s distributed are for testing purposes. Whilst these are final models, devices may not work with all US carriers. Since this is a Beta version of the software, users may experience some limitations. Please read the below FAQs before continuing.

Interested parties can sign up for the program starting today and save themselves ~$173 off the retail price. A little nothing for something, if you will.

Want the Nothing phone in the US? Be a beta by Brian Heater originally published on TechCrunch

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Haje is still dazed from spending a week deep in the bowels of Las Vegas for CES 2023 but is grateful to be back in the Daily Crunch saddle. Let’s see what’s happening in tech land! — Christine and Haje

The TechCrunch Top 3

More layoffs at Coinbase: Coinbase said it is going to cut another chunk of jobs, this time 20%, or 950 employees, and will abandon several projects, Manish reports. This is the crypto exchange’s second round of layoffs in seven months after cutting about 1,100 jobs in June.
Primed and ready: Amazon is going to expand its Buy with Prime service to the U.S. on January 31, Sarah writes. Buy with Prime’s delivery service is similar to Prime, but also includes “seamless checkout and easier returns, allowing merchants to establish their own direct relationships with customers.”
Chatting, but with a bot: Everyone’s ChatGPTing. Know how we know? Dubious ChatGPT apps are flooding the Apple App Store and Google Play Store. Ivan has more.

Startups and VC

German-based biotech company BioNTech — one of the big manufacturers of COVID-19 vaccines, among other things — is set to acquire InstaDeep, a Tunis-born and U.K.-based AI startup for up to £562 million (~$680 million) in its largest deal yet, Tage reports. The German vaccine maker intends to use InstaDeep’s machine learning to “improve its drug discovery process, including developing personalised treatments tailored to a patient’s cancer.”

Supermom, a parenting platform with 20 million users in six Southeast Asian countries, offers parents price comparisons, communities and the chance to earn money by completing surveys, Catherine reports. It gives brands a way to conduct market research and collect first-party data, which is important as marketers prepare for a post-cookie world.

And we have a smattering of additional stories for you:

Keeping an eye out — on the cheap: Frederic reports that Wyze launches its new $34 pan-and-tilt security camera.
Like tea, but functional: A brand-new “functional” tea brand, the Ryl Company, is steeped in cash with $6.7 million in new funding and is making its debut in Wegmans and Whole Foods, Christine reports.
Recycling the heat: Servers get hot, so why not use ’em for something useful? Qarnot creates green data centers by putting servers in central heating boilers, Romain reports. The company just raised $13 million to continue on its mission.
Like Etsy but Korean: Handmade goods marketplace Backpackr gears up to expand into Southeast Asia, reports Kate.
Better chat, with some ways to go: Anthropic’s Claude improves on ChatGPT, but it still suffers from limitations, Kyle reports.

A timeline for startup M&A processes: Key steps and factors to consider

“Not all companies are best positioned to go it alone, and that’s okay,” writes Vishal Lugani, general partner and co-founder at Acrew Capital.

In his detailed guide to the M&A process, Lugani offers a week-by-week deal timeline that breaks down every step between sourcing offers and post-close integration.

A lot can happen over the months it can take for a deal to close, so the article includes strategies for selecting an acquirer, maintaining product momentum, and managing your team (and investors!).

Three more from the TC+ team:

Hold on tight…: Salesforce turmoil continues into new year, as recent layoffs attest, Ron writes.
Gettin’ chatty: Some investors are (cautiously) implementing ChatGPT in their workflows, reports Natasha M, Christine, and Kyle.
Cookin’ on gas: Climate benefits of killing gas stoves aren’t what you think, but the health benefits are, Tim reports.

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.

Some sources told Manish that OpenAI’s startup fund is in talks to invest in silicon chip bigwigs Sam Zeloof and Jim Keller, who started Atomic Semi to manufacture chips. And get this: the proposed $15 million investment will value the company at $100 million. Not too shabby, er, should we say silicon-y.

And we have five more for you:

Matchmaker, app-style: Scams do happen, especially when love is involved. Not a good look for Tinder and other Match dating apps, so they are offering in-app tips on avoiding romance scams, Lauren writes.
Even more layoffs: Data software company Scale AI is cutting 20% of its workforce, Kirsten reports. In a blog post, CEO Alexandr Wang pointed to aggressive hiring during good times, but “the macro environment has changed dramatically in recent quarters, which is something I failed to predict.”
In privacy news: Natasha L writes about Facebook’s data-scraping breach leading to an enforcement lawsuit in Ireland, while Europe quizzes TikTok on various topics, including data safety, disinformation and Digital Services Act compliance.
Windows 7 security is in the rearview mirror: Microsoft ends Windows 7 security updates,Zack reports.
Teen screen time: Instagram and Facebook are looking at its advertising to young users and will introduce more limits on targeting teens with ads, Taylor reports.

Daily Crunch: Citing ‘unscrupulous actors’ and market trends, Coinbase CEO lays off 950 workers by Christine Hall originally published on TechCrunch

A little over two years after its public debut, Mineral is becoming its own Alphabet company. The team, which was formerly known as the “Computational Agriculture Project” (no prizes for guessing why they adopted the new name), just graduated from the X “moonshot” labs.

“After five years incubating our technology at X, Alphabet’s moonshot factory, Mineral is now an Alphabet company,” CEO Elliott Grant said in a blog post. “Our mission is to help scale sustainable agriculture. We’re doing this by developing a platform and tools that help gather, organize, and understand never-before known or understood information about the plant world — and make it useful and actionable.”

Years after attempting to build a robotics division largely through acquisition, Alphabet appears to be growing one more organically in-house. Mineral follows Everyday Robots and Intrinsic in growing from X to a fully released Alphabet subsidiary.

Mineral uses its in-house robots to create datasets and do research about different crops. It explains that — over the course of its half decade of (mostly stealth) existence — it’s discovered that most companies are doing a good enough job collecting the scope of data required to leverage machine learning.

“There is no single mode of data collection suited to every agriculture task or crop,” says Grant. “We began with a plant rover that could capture huge quantities of high quality images, and over time expanded to building generalized perception technology that can work across platforms such as robots, third party farm equipment, drones, sentinel devices, and mobile phones.”

The company’s end goal is creating detailed and rich datasets that can be used by farmers across the world to tap into previously unknown factors in growing. In doing so, it hopes to help cultivate crops that are more resilient to climate change, without exacerbating the urgent issue.

Alphabet X graduates robotic agtech firm Mineral by Brian Heater originally published on TechCrunch

Activity in the self-driving car industry, frenetic for years, has somewhat stalled in more recent times, but a handful of the most promising companies are continuing to see their businesses grow and attract investment in the process. In one of the more recent developments, Oxbotica, a startup out of England that develops software to power autonomous vehicles, has closed a Series C round of $140 million, money that it will be using to continue building out services for existing clients and to drum up new business in that wake.

The size of the round is big by any terms, but it’s a signal of how AI startups especially continue to fare well at the moment. It also shows the kinds of companies that are working with, and looking to back, startups breaking new ground in the space of autonomous driving.

The basic model for Oxbotica — eight years old and based out of Oxford, England — is B2B: It sells and customizes its autonomous software, which it dubs “Universal Autonomy,” for a range of enterprise customers. Its premise is that its flexible technology can power whatever it is that a customer needs: navigation, perception, user interfaces, fleet management or other features needed to run self-driving vehicles in multiple environments, regardless of the hardware being used and in integration with whatever other software its customers are using.

Underscoring its traction with that premise, this latest funding is coming from a mix of investors that include some of those strategic backers and customers. Japan’s Aioi Nissay Dowa Insurance Co., Ltd., and ENEOS Innovation Partners, the corporate VC of the mining conglomerate Eneos, are among its new investors; previous backers in this round include BGF, safety equipment group Halma, hospitality and recreation investor Hostplus, climate fund Kiko Ventures (IP Group), the online shopping company Ocado Group, internet giant Tencent, Venture Science and automotive component maker ZF. Several of these companies also invested in Oxbotica’s last round, a Series B in January 2021 of $47 million.

This round brings the total raised by Oxbotica to $225 million. The startup is not disclosing its valuation, but Paul Newman, the company’s CTO and co-founder, noted that the fact that it was one of the autonomous startups that’s raising big right now, and the current appetite for artificial intelligence startups that are building applications around their innovations, have contributed to a healthy number.

“You should take it to be in a space that investors are valuing greatly,” he said. At a moment when businesses, consumers, investors and startups themselves are reassessing things like self-driving technology through a more pragmatic lens, asking questions about unit economics and commercial and technical viability, Oxbotica, he said, has emerged as a leader in “the application of autonomy where the world needs it.”

That translated also into much shorter conversations with investors, the kind that are generally not happening across other sectors in tech. “It didn’t take that much time at all to show you can solve what is really needed versus what is not a problem at all,” CEO Gavin Jackson added. “It was a distinction investors understood quickly in the first 30 seconds of us talking to them.”

Indeed, while some of the more ambitious efforts around self-driving vehicles for consumers have been shelved or faced some tragic mishaps, it’s emerged that campus-style, closed environments where it’s either more dangerous and/or less efficient to employ humans to navigate vehicles have shaped up to be some of the most popular use cases for it and others building autonomous systems.

In addition to the industries of its strategic investors, other use cases where Oxbotica is building services include agriculture, airports, energy and shared passenger transportation.

Not to say that things are perfect. Some (and perhaps all) of its actual commercial deployments appear to be quite medium- to long-term. One of its big milestones from this year was in May 2022, when it ran Europe’s first zero-occupancy trial (note the word trial) on a publicly accessible road. It also worked on “metaverse-based testing” and forged alliances with insurance companies.

Newman admits what he described in our interview as “sticking points” that still need addressing in the very complex world of building autonomous vehicles and systems.

“It’s exhilarating when we can connect fleet management to our operating system,” he told me. In its favor, once something is solved, it’s solved for everyone. A mining company’s need to integrate Oxbotica with its system to dispatch drivers into mines is the same that Ocado will have for connecting its delivery vehicles.

The amount that it has proven, meanwhile, has convinced customers and backers that it’s not a matter of “if” anymore, but rather when this comes to fruition.

“Oxbotica really sets itself apart from its competitors thanks to its ambitious vision to unlock Universal Autonomy,” said Mitsuru Yamaguchi, senior managing executive officer at Aioi Nissay Dowa Insurance, in a statement. “We are excited to combine Oxbotica’s world-class AI and robotic techniques with our own pioneering expertise in the telematics insurance arena. This will leave us well placed to develop innovative insurance products and services which will create a safer, greener and more secure society for everyone.”

“We are excited to grow our investment in Oxbotica, which has become a global leader in autonomous vehicle software,” added Erin Hallock, managing partner at bp ventures. “Our sustained support is a great example of bp ventures’ continued investment in game-changing technology companies. By leveraging automation and digital technology we believe the team can improve safety and increase efficiency across a wide range of vehicles, and support bp’s ambition to accelerate the global revolution in mobility.”

Oxbotica raises $140M more as its B2B autonomous vehicle platform gains ground by Ingrid Lunden originally published on TechCrunch

After launching Elon Musk’s version of the Twitter Blue subscription service last month in five countries, the company has expanded the paid plan to users in Japan. Both the old (launched in 2021) and revamped Twitter Blue subscriptions were available in the US, Canada, the UK, Australia, and New Zealand.

Twitter noted on its support page that users in Japan will be able to buy the subscription for ¥980 ($7.40) per month on the web and ¥1,380 ($10.42) per month on iOS. These prices are marginally lower than the US prices of $8 per month on the web and $11 per month on iOS.

At the moment, Twitter Blue offers features like the blue verification badge, longer video uploads, priority ranking in conversation replies, a thread reader, and an edit tweet feature along with custom icons and themes. While some of these features were already present in the legacy version of the paid subscription, the verification mark, higher limit on video uploads, and a boost in rankings are newly introduced features.

After taking over Twitter, Musk has had lofty plans of reducing reliance on ad revenue by adding more subscribers. He launched a new version of Twitter Blue initially in November but had to quickly shut it down because of people impersonating celebrities and brands.

Twitter Blue’s expansion in Japan is not surprising. In his first all-hands meeting as Twitter boss, Musk reportedly boasted about the social network’s market share in the country. Estimates noted that Japan has more than 50 million Twitter users.

Since then the company has tried to put guardrails around the new verification system by mandating users to have a phone number to buy the Blue subscription and putting a 90-day cool-off period for newly created accounts. However, Twitter’s manual verification system of reviewing names and bio are not working as intended. Last week, a Washington Post reporter successfully created a fake account of Senator Edward J. Markey.

Twitter launches its Blue subscription service in Japan by Ivan Mehta originally published on TechCrunch