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One of the top problems facing device manufacturers today is overheating hardware. The chips inside PCs generate heat, which — when allowed to build up — majorly hurts performance. Cooling is less of a challenge when space isn’t at a premium. But as the marketplace pushes for ever-thinner notebooks and so-called ultraportables, manufacturers are being faced with a choice: compromise on design or on raw processing power.

Seshu Madhavapeddy and Surya Ganti hope to present a third option with hardware they’ve developed at their four-year-old startup, Frore Systems. Called AirJet and weighing in at just 11 grams on the low end, the microelectromechanical chip can supposedly deliver improved thermal performance by actively removing heat from processors.

“Until now, manufacturers have used antiquated thermal solutions like mechanical fans in notebooks, tablets and other consumer devices to remove heat. These inadequate thermal solutions are causing the devices to overheat,” Madhavapeddy told TechCrunch in an email interview. “To combat this, manufacturers have designed fail-safe functionality that prevents overheating by slowing down the processor after only a few seconds of operation. This means consumers never really get the full processor performance they pay for. Frore Systems’ AirJet chips unleash full processor performance by revolutionizing active heat removal.”

Madhavapeddy and Ganti share a long history in the mobile device and semiconductor industry. Madhavapeddy was the general manager of Texas Instruments’ smartphones business line for five years, after which he led the product and technology division at Samsung Mobile, Samsung’s mobile device subsidiary. Ganti was a research scientist at General Electric for seven years, where he developed “nanotextured” surfaces and algorithms for predicting the reliability of electromechanical systems.

Madhavapeddy and Ganti met at Qualcomm while working together on the company’s ultrasonic fingerprint sensor business. Madhavapeddy says they were both inspired by what they saw as “significant” limitations that processor heat generation was creating for device performance and decided to put their heads together to solve the challenge.

In high-level language, Madhavapeddy describes AirJet — under development for the past four years — as a “solid-state” chip that uses “pulsating” air flow to cool computer parts. Several patents filed by the company peel back the curtains a bit. AirJet, which sits above the hardware it’s meant to cool, is 2.8 mm thick and built on flexible, bendable polymer materials. It contains piezoelectric layers and electrodes stacked on top of each other and oriented around a central opening. (Piezoelectric materials produce electricity when they’re compressed or placed under mechanical stress.) A diaphragm coupled to the piezoelectric layers covers the central opening, vibrating and blowing air across the hardware to be cooled when a voltage is applied to the electrodes.

Pulsating heat pipes aren’t a completely new idea. Conceived as far back as 1990, they’ve been tested in various data center server designs over the past 20 years and proposed in academic papers for use cases like phone heat sinks.

But Madhavapeddy makes the case that, as opposed to many of the designs that’ve been floated to date, Frore’s technology is market-ready. He pitches AirJet as a solution for phones, PCs and tablets otherwise too thin to fit traditional active cooling systems, like fans.

“AirJet chips are scalable, meaning multiple chips can be easily integrated into devices to cool processors silently, resulting in major performance gains,” Madhavapeddy said. “AirJet chips can also be used as the thermal solution in dust proof-devices as, unlike fans, they are powerful enough to draw air through the IP68 air filter used to make devices dust-proof.”

While Frore claims to be working with “five of the world’s top ten device manufacturers” and expects its first AirJet chips to ship in Q1 2023, it’s still too early to tell whether the startup’s tech will live up to its promises. Madhavapeddy says that AirJet can deliver a roughly “2x” boost in processor performance compared to fan-based cooling, but the vague metric doesn’t account for the wide variation in fan size, setups and housing. That aside, it’s unclear whether Frore can produce AirJet units at the scale necessary for the consumer market, and whether the company can convince manufacturers that’ve invested in alternative cooling systems, like water cooling and vapor chambers, to pivot to a completely different approach.

Frore does, however, have votes of confidence from titans in the chip industry, including Qualcomm’s venture arm, Qualcomm Ventures, which led a $100 million investment in the startup alongside Mayfield, Addition and Clear Ventures. Intel is a customer; the company plans to collaborate with Frore to build AirJet into future laptops in its Evo hardware reference platform.

“Intel’s mission with Intel Evo is to unite the open PC ecosystem to deliver the best possible laptop experiences that people want. Engineering thin, light, stylish laptop designs that offer great performance while remaining cool and quiet are foundational to that mission,” Intel VP and GM of mobile platforms Josh Newman said in a press release. “Frore Systems’ Airjet technology offers a new and novel approach to help achieve these design goals in new ways.”

But what of the slowing PC market and demand for PC parts? (According to Gartner, worldwide PC shipments declined nearly 20% in Q3 2022 compared to a year ago.) While Madhavapeddy acknowledged that it could have an impact on Frore’s business, he seemed confident that AirJet’s expanding partnerships will compensate for shipment volume shortfalls in any single segment.

“The pandemic has increased the value proposition for AirJet. The world has become increasingly mobile and reliant on devices to stay connected in both the workplace and at home… We do not anticipate the broader slowdown in tech will adversely impact Frore,” Madhavapeddy continued. “Even if demand for consumer devices slows, in a market where manufacturers are fiercely competing for the consumer spending and market share, the ability to differentiate their devices by offering superior processor performance will ensure demand for the AirJet product. This is being reflected in customer interest in and demand for AirJet.”

Headquartered in San Jose, Frore has a 75-person workforce and has raised $116 million to date. Madhavapeddy says a portion of the capital is already going toward new generations of AirJet, which will deliver further performance gains (or so he claims).

Frore secures $100M, collabs with Intel to create a new way to cool processors by Kyle Wiggers originally published on TechCrunch

Losing weight sucks. It’s a deeply invidualized experience that’s bogged down by all sorts of societal expectations and fly-by-night promises. Many have amassed fortunes promising silver bullet solutions, all knowing full well that there isn’t any one-size-fits-all solution.

The promise at the heart of Lumen’s offering is a personalized health solution, based on individual metabolism. It’s certainly an appealing one – particularly for those who have struggled to meet their individual weight goals through more traditional methods.

We’ve been following the Israeli firm’s own journey for several years now, including a crowdfunding round, back in 2018. The following year, the company brought in an $8.5 million. Today it’s announcing a $62 million Series B. The round, led by Pitango Venture Capital, is easily the startup’s large to date, bringing its total funding to [tk]. Hanwha Group, Resolute Ventures, RiverPark Ventures, Unorthodox Ventures, Almeda Capital and Disruptive VC also participated.

Lumen developed a handheld hardware device that looks a bit like a vape. A built-in sensor measures the level of CO2 produced to determine “metabolic fuel usage” – whether the body is using burning carbs or far for fuel. It connects to a smartphone and the associated app gives you personalized food, exercise and sleep recommendations.

The company claims it’s able to accomplish in a $250 package (the personalized plans go up from there) what had previously taken expensive lab equipment to do. It’s an appealing promise, for sure.

“Until now, studying metabolism with the standard equipment was challenging for both researchers and participants,” cofounder and chief scientist Merav Mor says in a release. “The data collection was minimal and would require participants to come to a clinic for each measurement and a practitioner to analyze the results. Now researchers can easily collect multiple data points from participants and build more complex research protocols that unveil new physiological findings.”

The company hasn’t offered specific sales figures, but says that two million monthly metabolic measurements are taken using its devices. The new funding will go toward “support[ing] business growth and new research.”

Lumen raises $62M for its handheld weight loss hardware by Brian Heater originally published on TechCrunch

For those on the sidelines, the story of digital advertising over the past couple of years has been as entertaining as a binge-worthy TV series. Apple’s App Tracking Transparency (ATT) policy kicked things off in spring of 2021, and the plot only thickened with rising inflation, a likely recession and an unexpected cast of new ad platform characters: Netflix, Uber, and, curiously, Apple.

While dramatic, these headlines tend to gloss over what’s actually going on: Digital advertising may be in transition, but it is not dead. Consumer brands, especially direct-to-consumer (DTC), continue to rely on digital advertising and there are a growing number of ways to use it well.

Based on our work with hundreds of brands, along with a recent survey of 158 consumer marketing leaders, outlined below is what we know about the current advertising landscape. We’ve also compiled tips for navigating these options to cost-effectively capture revenue this holiday season and beyond.

Setbacks abound, but startups must be even more creative

The chaos of the past year has left advertisers with an ever-changing field of imperfect options and the need to continuously revise their approach. As changes driven by privacy concerns weakened the ability to target consumers, particularly on Facebook, 46% of consumer marketing leaders surveyed by Proxima said “difficulty targeting” and “limited budget” were their top two challenges to marketing effectiveness. About 40% specifically said changes to iOS’ privacy policies had a negative impact on their business.

Not surprisingly, the impact has been disproportionately felt by smaller startups. Among those surveyed, 70% of large companies expect to exceed 2022 revenue goals, but only 52% of SMBs reported similar levels of optimism. The SMBs in the survey were also 20% more likely to report that changes brought by iOS’ privacy policies have had a negative impact on their business.

Dramatic headlines may be masking upside opportunities

It is important for consumer startups to sift the opportunities from the doom and gloom headlines. For example, Meta’s stock price is much less important to you than the number of users on Facebook, which saw 1.93 billion daily active users in Q3 2022.

TikTok is more popular than ever, which is great for brands that want to experiment with a growing platform. But Instagram’s 2 billion monthly active users are hardly a thing of the past, which means the platform still presents a huge opportunity for brand building and engagement.

Despite a rocky road, consumer advertisers are hanging on

Not surprisingly, the levels of satisfaction with ad platforms included in the study — Facebook, Instagram, TikTok, Snapchat and Google — were notably low, with dissatisfaction rates ranging from 31% to 65% depending on the platform.

5 methods for leveraging digital advertising during a downturn by Ram Iyer originally published on TechCrunch

Car rental delivery startup Kyte said it’s on a mission to disrupt the auto industry by making people think twice about buying a car. Starting Wednesday, Kyte will now offer a car subscription service, following what the startup says was a successful subscription pilot with Teslas. The three-, six- and 12-month subscription plans will be available to all 14 markets in which Kyte operates, such as San Francisco, Chicago, New York City, Boston and, most recently, Fort Lauderdale, the company said.

A range of SUVs, sedans and economy cars, in addition to Teslas, will now be available for longer-term subscriptions. Kyte named a few makes and models it would add to its subscription fleet, including the Kia Forte, Toyota Camry and Jeep Compass. Subscriptions include registration, maintenance, roadside assistance and door-to-door delivery and pickup.

The move into the subscription business comes as the average price paid for a new vehicle in the United States continues to remain around the $48,000 mark, according to September data from Kelley Blue Book. With interest rates and average monthly payments up, many Americans are rethinking the purchase of a new vehicle. But does that mean they’re going to be okay with spending a minimum of $519 per month for a subscription service?

According to a recent Nationwide survey, consumers are shifting spending habits in preparation of an upcoming recession. Around a third have adjusted their budgets and reduced the amount that they drive, the latter of which is likely also attributable to the price of gas at the moment. Yet Erik Zahnlecker, Kyte’s director of new products, thinks there’s still a need for subscription car services today.

“Coming out of the pandemic, the way we live, work, play and travel has significantly changed. More than ever, ‘digital nomads’ are emerging, and Americans are looking for flexible options that match their new lifestyles,” Zahnlecker told TechCrunch via email. “Car leasing or ownership comes with hassles and commitments (like depreciation, lock-in, maintenance and more) that may not suit a consumer’s desired next move. At Kyte, we’re committed to creating options for anyone looking for a ride longer than a ride-share. This whitespace is highly desired, and we saw great success with our initial Tesla subscription rollout – so we wanted to make this offering more accessible.”

Kyte began offering Tesla Model 3s for $995 per month earlier this year; the company’s Tesla’s are only available for subscription, whereas the rest of the fleet will go between subscriptions and short-term rentals, according to Zahnlecker. Kyte wouldn’t share specifics on how many users signed up for a Tesla, but Zahnlecker said there has been zero downtime between subscribers due to demand.

“The majority of our subscription customers (>50%) choose to subscribe for 12 months, showing that subscriptions is not just for people ‘in between things,’ but is also a valid alternative to leasing or ownership,” said Zahnlecker.

It’s also possible that the Tesla subscription service worked so well because, well, Teslas are really popular vehicles. They’re a luxury status symbol, and renting one not only gets drivers out of paying $47,000 for what at the end of the day, is still just a car; it also allows drivers to test the waters of electric vehicle ownership. Kyte will start adding Chevy Bolt EVs and EUVs to its fleet in 2023, but initially only has the Teslas on offer. It’ll be interesting to see if Kyte’s customers are open to paying $600 per month for an unsexy car like a Camry. For Kyte’s sake, I hope so.

After all, subscriptions exist for a reason; they represent a mental shift from ownership to access, and consumers are undoubtedly putting value on hassle-free experiences. For companies, subscriptions can also counter high upfront operation costs — like the cost of leasing and buying a fleet of vehicles — with longer-term customer loyalty. But companies like Kyte that are offering both hardware and services as subscriptions need to be hyper-focused on unit economics and monitor their contribution margins in order to succeed.

Kyte appears to be well-funded for the moment. The company just closed out a $60 million Series B in November and secured $200 million in debt financing earlier this year from Goldman Sachs and Ares Global Management.

On-demand car rental company Kyte is now offering car subscriptions by Rebecca Bellan originally published on TechCrunch

Two months ago, the Securities and Exchange Commission (SEC) said it had fined 16 Wall Street firms more than $1.1 billion for “widespread recordkeeping failures” regarding maintaining electronic communications, contravening federal securities laws. In addition, the SEC is now probing private equity firms on their employees’ use of messaging apps for work purposes, including WhatsApp, Signal and Telegram, as many of these apps have functions that support messages that disappear automatically, representing potential violations of SEC rules.

To compound matters, many companies have now adopted remote or hybrid work models, enabling employees to mix working from the office and home, making it more difficult for financial institutions to track employees’ communications.

And it’s against that backdrop that Tel Aviv– and New York–based communication compliance platform Shield wants to address the issues that most banks and investment firms face, including record management, electronic discovery, supervision and surveillance.

Keeping up

Regulators continuously change or add new compliance standards faster than companies can adapt, which can lead to big fines and reputational damage for banks worldwide, Shield CEO and co-founder Shiran Weitzman explained to TechCrunch. Another challenge, according to Weitzman, is the difficulty in capturing data transmitted through apps such as WhatsApp. The complexity of communication channels, and the usage of both voice and text, make it more difficult for organizations to follow the “paper” trail.

To meet this rising demand for “more advanced” cross-channel surveillance, Shield announced Thursday it has raised $20 million in a Series B round of funding. Its previous backer Macquarie Capital led the round alongside UBS Next, a venture fund from Swiss bank UBS, and existing investors such as Mindset Venture and OurCrowd.

The four-year-old startup said that it plans to use the proceeds to grow its global presence and ramp up development of its communications compliance platform.

“There is an immediate market need for more advanced surveillance solutions to allow financial institutions to meet new regulations and fight financial crime,” Weitzman said. “Understanding that regulators will continue in this strict enforcement period, and that banks will not be halting usage of communication channels as work from home is now permanent.”

When asked how the company handles the users’ data, Weitzman said it operates under the same strict regulations as its customers. “Shield does not store users’ data and does not have access to customers’ data. We take proactive measures to protect data by masking personally identifiable identification (PII) within communications.”

Shield leans on AI techniques to help companies counter market abuse, bad internal actors and regulatory risk. The startup, which isn’t the only company using AI, would compete with AI-powered communication surveillance platforms like Behavox and Relativity in the industry. Shield recently introduced new eDiscovery capabilities allowing users to respond quickly to regulatory inquiries. The company partnered with London-based speech and NLP technology company Intelligent Voice to bolster its voice surveillance capabilities, Weitzman noted.

The company’s latest cash injection comes less than a year after Shield raised a $15 million Series A, and the company said that it has grown its sales by 280% year-on-year. The company said that it has also increased its customer base by 250% since its previous funding round back in January. In addition, Shield opened an R&D facility in Lisbon this year, Weitzman said, adding that the company chose Portugal because it is becoming a major European tech hub.

Shield, a communication compliance platform for financial institutions, raises $20M by Kate Park originally published on TechCrunch

Web3 developer platform Fleek has raised $25 million in Series A funding led by Polychain Capital, the company shared exclusively with TechCrunch.

Additional investors in the round include Coinbase Ventures, Digital Currency Group, Protocol Labs, Arweave, North Island Ventures, Distributed Global, The LAO, and Argonautic Ventures.

The startup is aiming to build an interface and protocol layer “to make the base layer of web[3] services” like storage, hosting and billing, accessible to anyone, according to its website.

“Our main initial focus is the content delivery market,” Harrison Hines, Fleek co-founder, said to TechCrunch. “That’s what Fleek serves today and where we see a huge missing in the web3 infrastructure stack. It’s a problem with all web3 protocols.”

The content delivery market (CDM) is dominated by a few big players like Amazon Web Services (AWS) and Cloudflare, to name a few, Hines said. And while Fleek originally worked with Web 2.0 infrastructure providers like AWS and Cloudflare, it plans to launch its own Fleek Network in 2023 and provide web3 technologies like decentralization, while still achieving Web 2.0-like performance, Hines added.

“Our vision for Fleek Network at its core, it’s a decentralized edge network where anyone can run nodes and provide resources to the network,” Hines said. “The internet is moving to the edge now. Most of the biggest platforms are edge related.”

Hines defines the edge as moving content away from one central server location to moving a loose coupling of different infrastructure and cloud services closer to the end user.

Fleek hosts about 50,000 apps on its platform today, mainly within the Ethereum ecosystem, but also among other protocols, too, Hines noted. To date, all Fleek products are built on crypto protocols like Ethereum, Filecoin, Internet Computer, InterPlanetary File System (IPFS) and Textile.

The fresh capital will be used to build out the Fleek Network and platform, while bringing on additional talent and growing its community, Hines said.

The startup will focus on building out in the web3 ecosystem first, but will later expand to Web 2.0 companies like video gaming platforms, streaming services or any platform with a lot of traffic, which is usually one of their biggest costs, Hines said. “In this market, where big companies are looking to cut costs, we do think Fleek Network can be an attractive solution and easier jump.”

The pricing on Fleek is “fluid so the metrics can be adjusted as it grows,” Hines said, but compared to Cloudflare, which charges about 5 to 15 cents per gigabyte of bandwidth, Fleek aims to remain below a penny per gigabyte, making it five to fifteen times less expensive.

“We’ve been trying to do this for years and there’s been a breakthrough in [the crypto ecosystem for] scalability and how to actually build these networks that gave us the confidence that we can do it and is on par with the scale, throughput and latency of existing web2 systems,” Hines said. “It was the perfect timing.”

Web3 developer platform Fleek raises $25M led by Polychain Capital by Jacquelyn Melinek originally published on TechCrunch

Zoe, a startup founded by doctors and researchers out of London and Boston, made its name during the pandemic with a popular — dare we say viral? — self-reporting Covid-19 app. Embraced both by consumers and researchers, it provided early data into how Covid-19 spread and the symptoms associated with the initial infection and its lingering after-effects (Long Covid) — insights that were hard to come by virtually anywhere else.

Then as the virus moved from pandemic to endemic and attention shifted to other ways of tracking, Zoe also shifted, back to its original, pre-Covid mission: using self-reporting tech to track and build a nutrition study of the microbiome, and to provide personalized insights to individual users of its app based on their reporting of what and how they eat and the wider insights gained from the research.

That app is now is taking the next step in scaling its operations, as it looks to onboard 250,000 people off a waiting list it’s had going for over a year: it’s announcing £25 million in funding (around $30 million at today’s rates), an equity investment that CEO Jonathan Wolf said values Zoe at £250 million ($303 million).

U.S.-based venture firm Accomplice is leading the round, with previous backers Balderton Capital, Ahren, Daphni, and new backer L Catterton also participating.

The funding comes on the heels of a Series B of £48 million, which closed with a $20 million injection in May 2021 (a number that bumped up to $25 million after we published our story). Since then, it has onboarded some 50,000 active paying users, alongside the nearly 5 million people who have self-reported nutritional data free of charge. Wolf said that most of the last round in still in the bank; the latest funding is an opportunistic extension, made to shore up capital in the face of potentially stormy waters in the markets next year.

“We are seeing a big acceleration in customer demand so what we want to do is scale our business significantly to be able to meet that demand,” Wolf said. “Given the tough economic environment, we wanted to make sure we have the capital to do this. In fact, the vast majority of the $25 million raised in the last round is still in the company.”

And alongside the venture round, it’s also hoping to bring on more interest through a crowdfunding campaign. Taking into its wider community of interest that Zoe says numbers 2 million (this likely includes many who follow Zoe and have provided contact details by way of its previous Covid work, but it also has a podcast and related content) it will be running a campaign for investing via crowdfunding site Crowdcube. That will open on December 13 to that community and a day later to Crowdcube users, and then to the public at large, with investing starting at £10, “at the same share price as ZOE’s private investors.”

In addition to onboarding more users waiting to join, the plan also is for Zoe to expand beyond diet.

“We are looking to deepen our research into nutrition, the gut microbiome, sleep, mood, activity and other factors to improve long-term health,” said Wolf, who co-founded the startup with Professor Tim Spector of King’s College London and George Hadjigeorgiou. It plans also to expand research and studies in the ZOE Health Study; with a greater number and variety of health and lifestyle studies advocated by our contributors and scientists that will cover areas like menopause and more.

While it does not have plans to build any of its own hardware — it does send out glucose monitors and other physical products as part of its assessment (see below) but these are not made by Zoe — it will be making more integrations with hardware already out in the market, an approach that is essential for triangulating data and getting more complete pictures of each individual reporting in which is essentially a big data analytics exercise.

“I don’t see us dong anything in hardware. So many are already in this area and it’s exciting to take inputs from a variety of them. No single measure is more important or determines something. It will take a combination,” he said. “In the future we’re excited about integrations with Apple Watch and more.”

The reason for the slow movement in bringing those waiting off the list is because of the process involved in doing so — one reason for the funding injection to speed up how it scales.

The 50,000 active users it has have opted to pay £299.99 initially to get a test kit to run an initial analysis of their systems. The price is high, Wolf said, because it includes a gut microbiome test, a blood fat test, standardised test meals of muffins (!), real-time blood sugar sensor (CGM) if opted in to our science study; and then in return a gut health report and a personalised insights report.

Users are then given an option to take on memberships at different price points to continue the work and insights. These start at £59.99/month and go down to £24.99/month if you take out an annual subscription.

In a consumer world of health apps that include free, ad-supported options, it’s a big ask for users to step up and put in hundreds of dollars into a service to improve how they eat. Wolf said that Zoe had found that one of the lasting impacts of the pandemic was that there’s been a shift in how the general public regarded their health and the role that their activities played in it.

“I think the pandemic has had a profound impact on how people think about their health,” he said. “They noticed how what they do and how they eat and exercise impacted on a disease. That doesn’t mean everyone is healthier but now more see that it’s not something you wait to do until you’re sick. You have to take responsibility for it and add to it over time.”

Indeed, Covid-19 saw a boom in activity: people were walking, cycling and running more; some were buying more fitness equipment for their homes when their gyms or sports clubs closed; and generally more people were trying to do more not just to be healthy in case they too got hit by the virus, but because they were no longer coming into work every day and found themselves more sedentary by default. Of course, there’s been a big shift back to old pre-Covid ways, but there has also been a lingering shift, which is something that Zoe hopes to play into — not least because of its traction with users during the peak of the pandemic, when it had amassed more than 5 million users in the U.S. and U.K. for its symptom tracking app.

Zoe has naturally conducted a study on its users — 500 of them — and says that those actively following its program for 12 weeks or more said they felt “healtier” for eating following Zoe recommendations. “Their top improvements were; improved mood & alertness, better bowel habits, improved blood sugar & fat, less bloating and better sleep quality,” said Wolf. Some 85% said they had reduced constipation, reduced bloating, improved mood, and reduced diarrhoea, he said; and 70% said they had more energy and less bloating. It’s running a larger randomized study now to get more insights, which will be ready next year, he added.

Zoe, which went viral with its Covid-reporting app, raises $30M to track nutrition and health by Ingrid Lunden originally published on TechCrunch

FTX founder Sam Bankman-Fried talked from an undisclosed location in the Bahamas today with reporter Andrew Ross Sorkin for a DealBook event, a discussion that his legal team “very much” did not approve of, he told Sorkin with a boyish grin.

Hedge fund billionaire Bill Ackman tweeted afterward that he felt “SBF” was “telling the truth.” But we’re not so sure. In fact, having watched the live-stream, we’re still wrestling with whether he was credible.

Throughout the back-and-forth, Bankman-Fried sounded almost studiously amateurish, insisting he didn’t knowingly commingle funds between FTX and the trading firm he controlled, Alameda Research, where it has since been discovered that the exchange had funneled $10 billion in customer assets to Alameda for use in trading, lending and investing activities.

Though between $1 billion and $2 billion appears to be missing, and though company executives reportedly set up a bookkeeping “back door” to circumnavigate red flags, when Sorkin asked about the outfits’ reliance on one another, Bankman-Fried said that he was “frankly surprised by how big Alameda’s position was, which points to another failure of oversight on my part, and a failure to appoint someone to be chiefly in charge of that.”

Notably, Bankman-Fried ultimately used “oversight” nine times, even as he appeared to blame others. Asked if he should have taken money from FTX’s users’ accounts at all, he pointed the finger at Alameda, saying, “I wasn’t running [it], I didn’t know exactly what was going on. I didn’t know the size of their position. A lot of these are things that I’ve learned over the last month that I learned as I was sort of frantically digging into this.” Obviously, he added, “that’s a pretty big mistake. I mark that as a pretty big oversight that I wasn’t more aware of.”

At many points during his back and forth with Sorkin, Bankman came across, too, as delusional. He said that before FTX filed for bankruptcy — a move he authorized grudgingly four days after it was first proposed — “There had been a lot of interest in financing [FTX]. A lot of fairly strong interest, you know, many billions of dollars’ worth.”

It really didn’t seem that way on the outside(!). There wasn’t interest from Binance, as was well-documented. There wasn’t interest from his scorched venture backers, who, by the way, Bankman-Fried spared today in the interview. (Asked by Sorkin whether “Sequoia Capital, Paradigm and some very big venture capital firms” that funded FTX ever asked Bankman-Fried about how much risk he was taking on and “whether they bear any responsibility,” he answered, “I don’t think that they’re responsible . . . most of what they were focused on was . . .what might FTX become . . .”)

Indeed, in many ways, Bankman-Fried behaved today very much like someone who doesn’t comprehend that his life just changed dramatically and who instead believes he can still steer the outcome of FTX, despite the fact that he was forced to resign. (FTX’s new chief executive, a corporate turnaround specialist, has called Bankman-Fried’s stewardship a “complete failure of corporate control.”)

He talked of “a lot of assets that are on hand [still at FTX], although many of them are not liquid. They were worth quite a bit more than the new liabilities a month ago, even, a lot of them a year ago.” Bankman-Fried relatedly suggested that he hasn’t accepted that his customers will lose everything.

He said toward the end of the interview, “I can’t promise you and I can’t promise anyone anything there, and it’s not really in my hands to a large extent. But I would think that it would make sense to be exploring [a pathway forward] because I think there’s a chance that customers could end up a lot more whole — I don’t know, maybe even fully whole — if there was a really strong, concerted effort.”

It was such a strange showing, it made us wonder why some of the most sophisticated investors in the world put him on a pedestal in the first place.

Sure, he has “had a bad month,” as he told Sorkin, to audience laughter. Yet it’s just as likely that Bankman-Fried and his circle are busily making the argument that he was simply inept — in over his head — and never intentionally participated in artifice.

It makes a big difference. U.S. prosecutors can pursue a civil action against someone accused of ineptitude or negligence, and that individual might face significant financial consequences. But if it’s proven that an individual schemed to mislead others, then fraud crimes are on the table, which also means jail time is on the table. It could mean a far bleaker future for Bankman-Fried.

Already, the U.S. Attorney’s Office in Manhattan has reportedly launched an investigation into FTX; the SEC and the Justice Department are also, naturally, poking around and trying to determine whether Bankman-Fried’s maneuverings intended to deceive or were instead an astonishing series of blunders.

It’s tempting to conclude the former, that Bankman-Fried made his decisions knowingly. Given his “crypto genius” status until recently, it’s hard to imagine he was so in the dark. But it was quite a performance today if so.

Was Sam Bankman-Fried’s appearance a performance? by Connie Loizos originally published on TechCrunch

Badili, a Kenya-based smartphone re-commerce startup, has raised $2.1 million pre-seed funding to scale its operations within Africa; one of the fastest-growing mobile phone market in the world.

The Venture Catalysts, V&R Africa, Grenfell holdings, and SOSV, participated in the round, as did family offices and angel investors from Kenya, Nigeria, South Africa and India.

Buoyed by the new funding, Badili plans to explore new growth opportunities in West Africa, where it hopes to tap an increasing demand for affordable second-hand smartphones, even as it scales its operations in Kenya, Uganda and Tanzania.

“We are launching in Uganda and Tanzania and have established strong partnerships with original equipment manufacturers (OEMs). Within the next six months, we will be expanding to a few West African markets to get our foot in the door of some of the major markets in Africa,” said Rishabh Lawania (CEO), who co-founded the startup with Keshu Dubey (CTO) early this year.

Badili carries out trade-ins and buybacks on behalf of major OEMs and phone dealers, and has, so far, signed partnerships with key brands like Samsung. It buys devices from individuals too.

Lawania told TechCrunch he launched the startup after noticing that re-commerce did not exist in Kenya as a legitimate and trustworthy industry, yet demand for pre-owned devices was high.

“One of my ex-employees in Kenya got arrested for buying a stolen phone, and it struck me that most people can’t really buy pre-owned electronics here because the only option they have is the grey market, which is risky. That is when Badili idea kicked-in. I thought something really needs to change,” said Lawania, also the founder of Wee Media (parent company of WeeTracker news site) and gadgets Africa.

Lawania said 60% of Badili customers are individuals upgrading from a feature to smartphone, adding that Badili devices cost less than half their original prices.

“We are providing an alternative to people who don’t want to pay full price for a device, and I am more excited about the fact that we are able to help a lot of consumers buy their first smartphone,” said Lawania.

Affordability remains a key barrier to smartphone penetration, which is key to powering Africa’s digital economy, in most countries across Africa including Kenya where feature phones still dominate the handset market. Recent data from the Communications Authority of Kenya indicates that while smartphone penetration is deepening, feature phones market share currently stands at 55.1 percent.

Across Africa, latest data from International Data Corporation (IDC) also shows that consumers opted for cheaper options as feature phones shipments grew by 10.6% while smartphone consignments dropped by 7.9% in the second quarter of the year owing to growing inflation and toughening economic outlook.

While the report predicted that smartphone shipments will recover, affordability and consumers buying power will continue to play a huge role in smartphone penetration in the continent.

Besides, Badili is tapping the growing refurbished and used mobile phones market, which is expected to hit $146 billion by 2030, growing at CAGR of 11%, partly driven by smartphone adoption in emerging nations.

Badili buys the phones through its platform, and network of shops and agents spread across the country. It uses its price estimation algorithm, that takes into account various factors including the age of the phone and model, to calculate the value of the phone. The phones are revamped, repackaged and resold with one year warranty.

Lawania said Badili takes details, including the I.D and mugshot, of the sellers, and also requires them to sign an affidavit stating that they are the rightful owners of the devices. For extra caution, he said, Badili has also setup a system that can flag frequent sellers.

He said he is setting up and scaling technology, systems, partnerships and networks needed to build Africa’s most trusted and biggest re-commerce consumer electronics marketplace.

Smartphone re-commerce startup Badili raises $2.1M pre-seed funding by Annie Njanja originally published on TechCrunch

Huel, the European provider of nutritional products, has sold more than 270 million meals across the globe since Julian Hearn started the company in 2015. Now with $24 million in fresh capital, it plans to do even more.

It’s been a while since we covered Huel, which originally launched in the United Kingdom in 2017 with a low-sugar, plant-based and low-carbon-footprint protein powder product and has since expanded into ready-to-drink, snack bars and hot lunch options.

In 2019, we reported on them when they launched their nutritional bars in the U.S. At the time, the company was buoyed by a Highland Europe-led $20 million venture round, at a $260 million valuation, it raised in 2018. There was even talk of Huel going public in 2021.

Today, much of the company’s sales are outside the U.K., with U.S. “Hueligans,” the company’s loyal fans, representing Huel’s second-biggest market, followed by Germany and Japan, CEO James McMaster told TechCrunch.

The company has now grown to 250 people, including a small office in New York. Year over year revenue growth is 40%, up to $170 million, which McMaster attributes to that strong new customer growth, the ready-to-eat hot lunch product launch (among others) and the company’s transition from solely direct-to-consumer to also retail stores.

“We’re at the stage where having this second round of funding allows us to keep focusing on that growth,” he said. “We are going to keep innovating with new products, and are really proud of where we’re heading. We’re now the business that we hope can be a truly global brand.”

Highland Europe is back to lead that new $24 million infusion, which now values Huel at $560 million. Joining the venture fund this time is a star-studded group of new investors, including actor and UN Goodwill Ambassador Idris Elba and his wife, Sabrina Dhowre Elba, also a UN Goodwill Ambassador, television presenter Jonathan Ross and sustainable activewear brand TALA’s CEO Grace Beverley.

“I’ve been a Hueligan for several years now, starting my journey while preparing for my role in ‘Thor,’ so to come on board with Huel was an easy decision,” Idris Elba said in a written statement. “I believe in their mission to deliver nutritionally complete food, sustainably. We have some exciting projects coming up and I look forward to spreading the message and raising awareness around healthy, low carbon food.”

Meanwhile, the new funding will also be deployed in continued international expansion, with a focus on the U.S. The investment will also support new product innovation, and continued expansion online and in retail stores.

As part of the Elbas’s investment, one of the new projects will include Huel working with them on their climate change initiative to help people eat at 1.5 degrees Celsius, the global warming limit the Paris Climate Accord is trying to reach.

Huel meals fit within a diet aligned with supporting that reduction, and the company “is excited to work with Idris and Sabrina as we’re equally trying to be a force for good in the world,” McMaster added.

Plant-based food brand Huel valued at $560M following Idris Elba-backed round by Christine Hall originally published on TechCrunch