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Tesla has once again lowered prices of its EVs — this time for U.S. buyers — as the automaker scrambles to shore up demand.

This is at least the fourth time the automaker has discounted its vehicles, or offered credits, in the past several months. The price reduction trend kicked off in October when Tesla announced price cuts in China up to 9% on the Model 3 and Model Y. Earlier this month, Tesla reduced prices for Chinese buyers again, this time by nearly 14%.

The company has also tried to woo U.S. and Canadian buyers with price reductions. Tesla offered in early December U.S. buyers a $3,750 credit towards a Model Y or Model 3 if they had their vehicle delivered in December 2022. In the last week of the year, the automaker upped that discount to $7,500, according to the company’s website.

Tesla has turned its attention once again to the U.S. market. The company updated its website last Thursday with new prices for U.S. buyers. The long range Model Y crossover now starts at $52,990 (not including fees), a nearly 20% drop in price.

This new, lower base price is important because it allows buyers to qualify for the $7,500 federal tax incentive. Only EVs priced below $55,000 qualify for the tax credit under new terms established in the Inflation Reduction Act that as signed into law last August.

Tesla also reduced the price of its high-performance Model 3 sedan by 14% to $53,990. Tesla’s oldest and most expensive vehicles, the Model S sedan and Model X, are also cheaper. Although the two vehicles are still far above the $55,000 cap.

The price reductions come as Tesla faces more competition from legacy automakers, startups and, in China, giants like BYD.

Tesla keeps slashing prices, this time by as much as 20% by Kirsten Korosec originally published on TechCrunch

World View, a startup developing stratospheric balloons for Earth observation and tourism, is heading to the public markets. The company announced Friday that it would merge with special purpose acquisition company (SPAC) Leo Holdings Corp. II in a deal worth $350 million, as the startup seeks to build out what it calls “the stratospheric economy.”

The deal, which is expected to close in the second quarter of this year, will provide the combined company with up to $121 million in gross proceeds, plus an option to enter into additional equity financing agreements for up to $75 million. The $121 million figure is assuming no shareholder redemptions, however, and as we’ve seen with some space SPACs in the past – notably Virgin Orbit, which we covered earlier this week – an unexpected number of redemptions can sometimes drastically eat into that figure.

Tucson, Arizona-based World View says its stratospheric remote sensing balloons offer specific benefits over traditional satellites. The company’s remote sensing balloon systems – which it calls Stratollites – can fly at altitudes up to 29 kilometes (95,000 feet), and World View says they could eventually serve verticals from defense to agriculture.

That isn’t the only use case for the balloons, as World View sees it. In 2021, the company also announced its intention to launch a tourism business using the balloons. World View says more than 1,200 people have reserved their place in line for a stratospheric balloon flight; the $500 deposit forms just a fraction of the $50,000 ticket price. Each trip will last between 6-8 hours.

World View has raised $48.9 million to date, according to Crunchbase, with its most recent funding round closing in 2018. Last November, the company announced a partnership with Sierra Nevada Corp. to jointly operate balloons for defense intelligence, surveillance and reconnaissance. The same month, World View announced a separate agreement with atmospheric monitoring company Scepter Inc. to measure methane levels in Texas’ Permian Basin.

SPACs have become a popular vehicle for private companies looking to enter public markets outside the traditional IPO process, and get a large injection of cash in the process. Major space players including Rocket Lab and Planet Labs have all completed SPAC transactions over the past two years. While some companies – like the two I just mentioned – have been fairing pretty well on the public markets, space SPACs in general have badly underperformed, particularly relative to legacy aerospace companies, with a handful of companies seeing a dire drop in stock price.

Stratospheric balloon company World View to go public in $350M SPAC deal by Aria Alamalhodaei originally published on TechCrunch

Google warned on Friday that if the Indian antitrust watchdog’s ruling is allowed to progress it would result in devices getting expensive in the South Asian market and lead to proliferation of unchecked apps that will pose threats for individual and national security, escalating its concerns over the future of Android in the key overseas region.

“Predatory apps that expose users to financial fraud, data theft and a number of other dangers abound on the internet, both from India and other countries. While Google holds itself accountable for the apps on Play Store and scans for malware as well compliance with local laws, the same checks may not be in place for apps sideloaded from other sources,” the company wrote in a blog post, titled “Heart of the Matter.”

The Competition Commission of India has slapped two fines against Google, alleging the Android-maker abused the Play Store’s dominant position in the country and required Android device makers to pre-install its entire Google Mobile Suite.

The Indian watchdog has ordered Google to make a series of changes to its business practices that analysts say could topple the company’s financial viability in the market. Google has appealed against the directions in Indian courts.

“Google has partnered deeply with India in the last several years of its exciting digital transformation. However, at a time when only half of India’s population is connected, the directions in the CCI’s order strikes a blow at the ecosystem-wide efforts to accelerate digital adoption in the country,” the company wrote in the blog post.

Google also warned that if the Indian antitrust watchdog’s orders were to be followed, app developers will have to pay higher cost.

“In a forked Android environment, small developers will be forced to prioritize which of the various incompatible Android ‘forks’ they write and maintain apps for, as their costs will increase with each additional version they support,” the company wrote.

“They will no longer have the level playing field they have today with Android, and larger developers, who can support a wider range of incompatible forks, will be able to dominate the market based on their scale, rather than the quality of their product.”

India is Google’s largest market by users. Google’s mobile operating system powers 97% of the country’s 600 million smartphones, according to research firm Counterpoint.

Google in 2020pledged to invest $10 billion in the South Asian marketover the coming years. It has already financed up to $5.5 billion in thelocal telecom giants Jio PlatformsandAirtel.

Google says India antitrust order poses threat to national security by Manish Singh originally published on TechCrunch

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

This week, Natasha was joined by Mary Ann Azevedo and Rebecca Szkutak to talk about the latest and greatest in tech. Before we get into what we got up to, can we just say how great it is to be back? It feels therapeutic to be back on the mic to digest the news in terms of trends and startup happenings; and we hope you feel right about the same.

Without further ado, our show touched on a lot this week:

Deals of the week include Inflow, which has developed a self-help app designed to help people manage their ADHD, Cartograph Ventures, a new venture fund run by an ex-Juul operator, and the latest lawsuit and layoffs happening over at Carta
The plethora of fintech M&A that took place this week, including Fidelity’s acquisition of a startup called Shoobx (we couldn’t pronounce its name either) and Deel’s buyout of Capbase.
Microsoft’s deal with ChatGPT OpenAI which, we’ll admit, has a structure that stumps even us. Plus, we talk about how Pittsburgh’s expertise in AI may help give its startup scene a boost.

We’ll end with a reminder that the TechCrunch podcast network is now a machine that produces content, daily, from the most diverse slate of hosts in the tech pod world. Proud of our fellow co-hosts, and for those of you who may be starting a resolution or habit-stacking to start 2023, consider giving our other shows a try.

Equity drops at 10:00 a.m. PT every Monday and at 7:00 a.m. PT on Wednesdays and Fridays, so subscribe to us onApple Podcasts,Overcast,Spotifyandall the casts. TechCrunch also has agreat show on crypto, ashow that interviews founders, one thatdetails how our stories come together, and more!

Frank-ly, the Kardashian method won’t work for SBF by Natasha Mascarenhas originally published on TechCrunch

What is going to happen to the 15,000 colorful electric scooters that currently spill across the streets of Paris? On March 23rd, their fate 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.

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

Paris has been a pacemaker in the electric scooter race. As one of the first cities to approve their use in open city environments, city’s residents (and visitors) took to them as a convenient way to navigate around halting traffic and congested public transport scooters in Paris provided a counterpoint to the claims that they were overhyped, over-capitalised by unimaginative VCs and a flash in the pan.

“This is important for everyone. In terms of business size, Paris is very important — it’s the biggest city in the world from a business point of view,” Dott’s director of marketing and communications Matthieu Faure told me. “And even from a symbolic point of view, Paris is important.”

Things started to look shaky starting in September 2022, when the city’s Deputy Mayors David Belliard and Emmanuel Grégoire requested a meeting with the three mobility operators. They said that Dott, Lime and Tier weren’t doing enough when it came to safety and urban clutter. But this wasn’t the first time that the city of Paris had said that they weren’t satisfied with these services.

From the word go, there was no proper regulation in place and initially that led to a dozen different scooter startups rolling out their fleets in Paris — Bird, Bolt, Bolt by Usain Bolt (oui, deux Bolts), Circ, Dott, Hive, Jump, Lime, Tier, Voi, Ufo and Wind.

That eventually led to the tender process and a new set of rules — a maximum speed limit of 20 km/h and some dedicated parking spaces.

Then in 2021, tragedy struck, when a pedestrian was killed in a scooter accident. That led to more restrictions on scooter services. Scooter companies agreed to implement hundreds of slow zones with a 10 km/h speed restriction in specific areas — pedestrian streets, public squares and car-free areas. At one point, the city of Paris even considered turning the entire city into a slow zone but ditched the plan.

There’s also the climate change question — and whether that’s really enough of a selling point. Scooter promoters like to say they are a green option for getting around. But as TechCrunch’s Rebecca Bellan has pointed out, scooters aren’t necessarily helping when it comes to environmental goals in certain urban areas. Such is the case in Paris.

An extremely dense city with an efficient subway network and a subsidized bike-sharing service with more than 400,000 subscribers, when people living in Paris need to go from A to B, they have a ton of options. Some people riding on electric scooters would have used their moped or requested an Uber, but many use scooters instead of the metro, which is arguably a greener mode of transportation compared to electric scooters.

And yet, both tourists and Parisians have embraced electric scooters in a massive way.

In October 2022, Dott, Lime and Tier registered more than 2 million rides. Out of the 400,000 users spread across the three services in Paris, 85% of them live in the city.

Operators each have a hard cap at 5,000 scooters, meaning that there are roughly 15,000 scooters in the streets of Paris. According to Fluctuo, there are close to 300,000 shared scooters in 33 European cities.

But each scooter is used quite extensively in Paris — several times per day. Here’s a chart of the total number of scooter rides per month in Paris:

The promise of metrics like these has led to massive valuations and funding rounds. According to Crunchbase, to date, Lime, one of the companies that popularized the concept of free-floating scooters, raised $1.5 billion. Dott managed to secure $210 million while Tier grabbed nearly $650 million.

To be sure, it’s been mostly quiet on the funding front for these companies for much of the last year. Partly this is because the most publicly visible of these companies, Bird, which pointedly is not in Paris but is traded on the NYSE, has totally run out of charge. (With its market cap now at less than $86 million — compared to over $2 billion when it went public in March 2021 — last week Bird announced a $32 million cash injection by way of convertible notes and personal investments from founder and chairman Travis VanderZanden and CEO Shane Torchiana. The money came at the same time that Bird acquired the previously spun out Bird Canada and made other moves to try to shore up its finances.)

Turning back to Paris, following the September 2022 meeting, the three active scooter companies Lime, Dott and Tier got the civic message: they shouldn’t take for granted that scooter licenses would be renewed in 2023. With the wider market climate definitely not in their favor, proving that they are respectful companies in their marquee city became priority number one.

In October 2022, the three operators put together a list of 11 proposals that would improve safety and public space integration, ranging from banning users who do not respect the road traffic regulation to using camera-based sidewalk detection systems.

Dott, Lime and Tier even started implementing some of those items. They added an age verification system and asked its users to take a photo of their ID. Similarly, there is now a registration plate on every scooter. This way, if there are two people riding a scooter at the same time, the police can write down the registration plate and the current time. Scooter companies can then find out who was using a specific scooter at that specific time.

“We’ve decided in December to proactively roll out two of these, notably on ID verification and license plates. After 30 days, we now have 100% of shared e-scooters in Paris that have a license plate, and over 160.000 IDs have been verified and checked,” Erwann Le Page, director of public policy for Western Europe at Tier, told me.

And then what happened? Nothing happened.

The negotiation tactic of silence

The city of Paris is divided on scooter regulation. Deputy Mayor David Belliard has been one of the most vocal opponents. He regularly claims that scooters should be banned, and his words carry weight: among other things, he’s in charge of transportation.

But the fact that he’s using media interviews to say that scooters should be banned proves that not everyone in the city council agrees with him.

“It’s a personal opinion, he’s against shared scooters,” Dott’s Matthieu Faure said. “We don’t really understand why. He doesn’t give any rational explanation.”

In particular, what does Anne Hidalgo, the Mayor of Paris, think about scooters? Nobody knows for sure.

“The City Council has not communicated any decision yet. To date, the City has not responded to any of the meeting requests and letters sent by Lime or the two other operators,” a Lime spokesperson told me.

“We have not heard back from Paris just yet. Our contract ends on March 23rd,” Tier’s Erwann Le Page added.

We have asked the city of Paris for a comment, and we will update the story if we hear back.

If I read correctly between the lines, Anne Hidalgo will ultimately have to decide whether scooter licenses should be renewed. Everything else you hear on this topic is just noise.

And there is no reason to communicate with scooter companies just yet. Scooter companies are already improving the safety of their services because the Mayor of Paris is remaining silent.

In other words, saying nothing is the best strategy to get improvements from operators right now.

Reducing dependence on scooters in Paris

In contrast to the early days of shared scooters, micromobility companies have mostly switched to full-time employees to repair, replace, move vehicles and swap batteries.

There are currently 800 people working for Dott, Lime and Tier in Paris. There are another 200 people working indirectly with the three operators. In particular, a subcontractor company patrols the streets of Paris and works with all three companies.

And this model has been working well. Dott says that it is currently profitable in Paris when you take into account all fixed and variable costs associated with its Paris operations, including vehicle depreciation and amortization (EBIT profitable).

While Dott, Lime and Tier are currently live in dozens of cities, Paris still represents a good chunk of these companies’ revenue. That’s probably why they have decided to launch bike-sharing services with free-floating electric bikes.

“We are currently operating 7,000 [bikes] in Paris and we plan to continue doing so,” a Lime spokesperson told me. Similarly, Dott has a fleet of 3,500 bikes while Tier manages 2,500 electric bikes.

This time, there was no tender process for free-floating bikes but operators still had to sign an agreement with the city of Paris. They also pay a license fee.

Adding electric bikes is a smart move as there are some synergies between scooters and bikes. For instance, Lime uses the same batteries for its scooters and bikes, meaning that the operations team can swap batteries for all vehicles when roaming the streets of Paris.

But it’s clear that Dott, Lime and Tier still want to offer scooters after March 23rd. On Wednesday, a group of employees working for Dott, Lime and Tier protested in front of the city hall. They were asking for a meeting with city officials to get some clarity.

Once again, their demands were met with silence. Even if the city of Paris doesn’t seem to care about media coverage on the license renewal, the impending deadline means that the Mayor of Paris will have to make a decision sooner rather than later. And many micromobility companies and local governments are turning their attention to what that answer will be.

Scooters in Paris are at a crossroads by Romain Dillet originally published on TechCrunch

While some crypto-focused venture capitalists are bullish for 2023, others see it as a hazardous time.

“I think it’s going to be a fairly choppy year,” David Nage, venture capital portfolio manager at Arca, said to TechCrunch. “You’re going to have a pretty strong stomach for this over the next few years here. We’re trying to be healthy, mindful and have grounding out there and not let emotions affect us.”

Many investors are trying to put last year’s chaotic market behind them and look forward to the future in a still investor-centric environment. But the competition in the market will heat up as investors write fewer checks and become more selective.

Internal sentiment among VCs is a “wait and see” game, Nage said. “We’ll wait and see how things roll out for the beginning of the year.”

The first quarter of 2023 may be slower than 2022. “I’d probably put money on that if I had to,” Nage said. “Rounds will also be fewer too; probably up to 50% less if I were to predict.”

Crypto in for a ‘choppy year’ of slow capital deployment, investors say by Jacquelyn Melinek originally published on TechCrunch

One startup is banking on the fact that businesses are eager to earn as much interest as possible on their cash.

Mayfair is a new fintech startup that offers businesses up to 4.02% APY, a number it claims is among the highest out there. How a startup that is barely two years old able to offer such a high interest rate to businesses goes back to its partners. Mayfair itself is not a bank, but rather a fintech company that offers FDIC-insured products through an Arkansas-based bank called Evolve Bank & Trust. The money is actually moved by Stripe via its technology into an account at Evolve, with Stripe holding the ledger.

“We’ve tied all that together,” said Mayfair co-founder and COO Munish Chopra.

Chopra and Daniel Chan had worked at private equity hedge funds for most of their careers and grew frustrated by not being able to put any of his own money to work “for decent yields, with the average savings account for businesses paying 0.3% in interest.”

“And we didn’t want to take any risks with our money either,” said Chopra, who previously worked as managing director of Triton Partners.

The pair teamed up with serial entrepreneurs Kent Mori andKevin Chan in February 2021 to start a company, exploring different business models before settling on Mayfair’s current offering.

Beyond providing access to higher interest rates, Mayfair says its software gives businesses a way to choose how much they need for operations and earn yield on the rest via automated cash management.

“On a daily basis, we’ll rebalance your accounts to make sure that if you’ve got say, more than half a million in your operating account, we’ll move that into the cash account so that it can earn maximum yield,” Chopra said. “And if you dip below that, then we’ll top up your account so that you always have the half a million bucks that you need for your operating purposes.”

Notably, Mayfair managed to raise $10 million in venture funding across a $2 million pre-seed and $8 million seed round before it had even settled on its current concept. The raises took place before the downturn that has hit the startup world began in full force, with the seed round closing in April of 2022 in conjunction with the closing of a $4 million debt line. Amity and BoxGroup co-led Mayfair’s pre-seed financing. Tiger Global, led by John Curtius (who has since departed the firm), led the company’s seed raise with Amity and BoxGroup also participating.

“As we were going around and trying to figure out what our options were, it turned out that if we pushed hard enough and negotiated hard enough, we could get far better [interest] rates, and we could develop far better partnerships,” Chopra told TechCrunch in an interview. “So as we were doing that, it became obvious to us that actually we were supposed to start a company that makes that rate available to others, whether they’re startups, or more successful companies…That’s obviously a very sensible thing for people to do with cash, especially now when there’s trouble with inflation and everyone’s downsizing and needs to do something with their cash.”

Mayfair went live with its offering in late 2022, and is emerging from stealth with “dozens” of customers, including freight logistics startup Factored Quality, on its platform.

“Some of them have very small balances, like tens of thousands of dollars,” Chopra said. “Some of them have tens of millions of dollars. And it’s not limited to the U.S. either.”

In the short term, Mayfair is eager to line up more partner banks and build out more products. The company believes that it can attract banks as partners by pledging to deliver a higher amount of deposits than they would get on their own.

“They don’t have to pay to have a marketing force or for distribution,” Chopra said. “We’re doing that effectively, and then handing them a pot of cash. If they had to borrow overnight, they’d have to pay more.”

Evolve pays Stripe. Stripe in turn pays Mayfair and Mayfair pays its customers, keeping what Chopra described as a small cut. Down the line, the company is planning to charge for certain functions related to cash management that is not yet built out. Chopra said the company doesn’t view fellow fintech Mercury as a competitor (that company too is partnered with Evolve), and views its services as “complementary.”

Presently, Mayfair has 12 employees. It is using its funding toward hiring, with a focus on engineering, product and design.

Patrick Yang, founding general partner of Amity Ventures, told TechCrunch via email that he was drawn to the caliber of Mayfair’s founding team.

For example, Kevin Chan also founded Headway, which has raised over $100 million from investors such as Andreessen Horowitz, Accel, GV and Thrive. Meanwhile Dan Chan founded JANDI, which is dubbed the Slack of Asia.

“I’ve known the team for many years before investing and was drawn to their ability to execute and the speed at which they’ve been able to ship quality products that are being used at scale. They have a massive vision to be an end to end finance platform for fast growing companies that includes management and automation around treasury, finance, accounting, and operations,” Yang told TechCrunch. “As an investor in Carta, I see a similar path for Mayfair to being a vital part of every business starting with treasury management as Carta did with cap table management.”

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Backed by Tiger Global, Mayfair emerges from stealth to offer businesses a higher yield on their cash by Mary Ann Azevedo originally published on TechCrunch

Africa is seen as the next trade frontier, following the coming into force of The African Continental Free Trade Area (AfCFTA), which created the single largest unrestricted trade region in the world. However, while trade liberalization is meant to spur intra-regional commerce, its take-off is dependent on key infrastructure investments to ensure supply chain efficiency. More progress is linked to how quickly market information circulates to key stakeholders including traders, regulators and financiers.

Realizing emerging opportunities, Xetova, a Kenyan startup, is deploying technologies that make information on market opportunities accessible to traders. It is now building a network of large, medium, and small enterprises, which will be tapped to draw insights and foresights on market opportunities and risks.

“We are building a trust network that, for example, allows a company in Kenya to know who to work with in a country like Nigeria, South Africa. This trust network can only be built with the ability to collect verifiable data,” said Bramuel Mwalo, Xetova founder and CEO, adding that his company is working on the largest trade intelligence and supply chain support network.

To ensure that trade trends, reports and highlights are authentic, Xetova, which was founded in 2019, is positioning its network on data from its insights service, which businesses use to interpret data on supply chains, spend, revenue, and general management performance into actionable insights.

The insights service is the first in Xetova’s suite that clients sign-up before subscribing to others that include trade financing and linkages to wide trade networks.

Mwalo’s interest in African trade was driven by research he was part of that showed that entrepreneurs have a high chance of success if they gain access to large procurement deals and less fragmented distribution channels.

“That finding made me curious about B2B trade, large supply chains, and how entrepreneurs in Africa access large procurement opportunities. I developed this theory that data can significantly drive trade and how businesses access opportunities, manage risk and relate to each other,” said Mwalo.

“Then my PhD thesis explored ways of getting B2B data accessible in the sense that everybody in Africa who’s trying to do business should actually access data on opportunity, and risk and network. This information should be readily available to the market and where it is available, it significantly changes how trade is done, because at the end of the day, we perceive risk differently,” he said.

Mid his studies, Mwalo took time off to join Kountable, a financier that provided loans to SMEs that are locked out of formal institutions because of lack of collateral.

In his two years as a Kountable executive, he says, they financed $32 million worth of deals, supporting 200 entrepreneurs in several countries including Kenya and Rwanda. It, however, proved hard for them to scale lending, even with a $150 million line of credit, due to lack of verifiable data on the operations of many enterprises.

“Initially, business went really well, and the uptake was fantastic. The challenge came when we needed to scale beyond the 200. Every time we started engaging businesses outside our network, we lost money. Their needs were growing too fast, faster than our ability to do due diligence,” Mwalo said.

“That point is when I realized the biggest issue in trade within Africa is not capital, it is information asymmetry in terms of where value, security and returns are,” he said.

This experience drove him to launch Xetova to ensure that businesses understand and unlock the value of the data they possess, use it to inform solutions for their challenges, and demonstrate how it can be harnessed at scale for trade intelligence that can open up new partnerships and bigger markets. This is in addition to making it possible for businesses to access loans based on their own data and insights, which are used by lenders within Xetova’s networks to offer tailor-made loans.

Besides serving enterprises, Xetova counts government agencies among its clients, with whom it is working to improve efficiency in healthcare. For such entities it provides insights on consumption, distribution, procurement spending, supplier and payment performance.

The company claims to have booked $2.45 million in revenues by December last year, and facilitated trade finance to the tune of $7 million.

Xetova is looking to grow its clientele base from the current 60 large enterprises to 300 in the next 18 months.

The firm is targeting to sign up 10 major distributors in Africa, to increase access to over 10 countries from the current seven, and to facilitate $20 million in trade finance.

Xetova, which raised $4 million in an equity-debt seed round last year led by South Africa’s TRT Investments, is also launching a fellowship program for potential investors.

Xetova exploring market data gaps in Africa to boost trade insight access by Annie Njanja originally published on TechCrunch

Africa seemed to defy the global venture funding decline in the first half of 2022 after its startups raised $3 billion, double the amount secured over a similar period the previous year. However, the VC market correction caught up with the continent in the back half of last year, when ticket sizes fell and fewer deals closed as investors tightened the purse strings.

VCs now predict that the funding slowdown in Africa will be sustained in 2023 as investors continue to pull back, making it harder for new and existing startups to raise capital.

“With the global economic slowdown trickling into 2023 due to inflationary pressures and tightening monetary policy, investors on the continent will maintain a judicious approach to investment and African startups will continue to find fundraising challenging,” said Bruce Nsereko-Lule, a general partner at Seedstars Africa Ventures.

As a ripple effect, the operating environment for startups is expected to worsen this year, leading to a surge in layoffs, scaling down of activities, down and bridge rounds, and business shutdowns, continuing the trend that picked up at the end of 2022.

Mega-rounds are expected to be scarce, too, as was the case in the last half of 2022, when no deals over $100 million were signed, according to The Big Deal, a database of publicly disclosed deals. Overall, six mega-rounds were closed last year (all in the first six months), half of the number of such deals closed in 2021, when VCs invested record amounts.

Africa predicted to experience sustained funding slowdown in 2023 by Annie Njanja originally published on TechCrunch

Crypto exchange Crypto.com is cutting its global workforce by 20%, it said on Friday, as it navigates ongoing economic headwinds and “unforeseeable” industry events.

This is the second major layoff at the Singapore-headquartered Crypto.com, which cut 250 jobs in mid-last year — though a report suggested that more than 2,000 people were either let go or left at their own will. The company did not say what roles were being eliminated in the new round of layoff but blamed the collapse of FTX, whose misappropriation of customers’ funds and bankruptcy “significantly damaged trust in the industry.”

“We grew ambitiously at the start of 2022, building on our incredible momentum and aligning with the trajectory of the broader industry. That trajectory changed rapidly with a confluence of negative economic developments,” Kris Marszalek (pictured above), co-founder and chief executive of Crypto.com, said in a blog post.

As with firms in other industries, crypto companies are aggressively undertaking major decisions to survive the downturn in the broader market, which has reversed much of the gains from the 13-year bull run. Coinbase cut about 20% of its workforce earlier this week in its second round of major layoffs at the firm. Kraken said in November that it plans to lay off 1,100 people, or 30% of its workforce.

Even then Crypto.com had a especially rough last year. The firm received some criticism for its cringey/overly enthusiastic Matt Damon ad; accidentally sent an Australian customer more than $10 million in a snafu, and grappled with industry concerns over its financial health performance.

The firm received a vote of confidence from auditing firm Mazars, which said Crypto.com users’ crypto assets were fully backed one-to-one. But days later, Mazars, which also audited Binance, said it had paused its work with crypto clients.

“The reductions we made last July positioned us to weather the macro economic downturn, but it did not account for the recent collapse of FTX, which significantly damaged trust in the industry. It’s for this reason, as we continue to focus on prudent financial management, we made the difficult but necessary decision to make additional reductions in order to position the company for long-term success,” Marszalek added.

Crypto.com cuts 20% jobs amid ‘unforeseeable’ industry events by Manish Singh originally published on TechCrunch