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As we get closer to the end of the year, I thought it would be a good time to catch up with a few people who kept a close eye on deal flow in 2022 and look for indicators of what might be coming in 2023.

On a side note, this newsletter is going on a break until January 7, 2023. Thanks a lot for reading me since I took over from Alex back in May. I look forward to writing more dispatches in the New Year! — Anna

An update on deal-flow newsletters

I wrote a piece in May about deal-flow newsletters, whose goal is to help investors discover interesting startups without leaving their inbox. In light of how the global market for startup investment has changed — dwindled — in 2022, and how media companies have struggled, we were curious how the projects we learned about earlier in the year were doing. So we checked in, chatting with the founder of deal-flow newsletter PreSeed NowMartin SFP Bryant.

He shared the following updates:

From the start of May to the start of December, PreSeed Now has profiled more than 50 early-stage B2B and deep tech startups from around the U.K.
It’s driving deal flow. Many startups report getting interest from tech investors as a result of the coverage. Startups have also recruited staff and gained additional media interest as a result of being featured.
In terms of actual investments generated, that is a bit harder to measure at this stage, but I’m going to conduct some research into this as we approach the newsletter’s first birthday in May 2023.

Deal-flow mavens aren’t sweating the venture slowdown by Anna Heim originally published on TechCrunch

The latest hit Netflix series “Wednesday,” the “Addams Family” spin-off directed by Tim Burton, has reached a milestone that only “Stranger Things” Season 4 and “Squid Game” managed to accomplish. “Wednesday” surpassed 1.02 billion total hours viewed in just three weeks since its debut, the company announced, with over 150 million households streaming the show. This means it’s now the second most popular English-language series on Netflix.

“Wednesday” premiered on November 16 and has since become a cultural phenomenon, inspiring billions of TikTokers, including “Mother Monster” herself, Lady Gaga, who recreated Jenna Ortega’s (plays Wednesday Addams) choreographed dance scene in episode four, “Woe What a Night.” The hashtag #wednesdayaddams, has 16.9 billion views on TikTok.

Plus, the kooky young-adult series was responsible for the surge in listening streams for “Goo Goo Muck” by The Cramps, which, as of this writing, has over 16 million plays on Spotify. Similarly, “Stranger Things” resurfaced Kate Bush’s song “Running Up That Hill,” which spiked in popularity on both TikTok and Spotify.

It’s worth noting that “Wednesday” stole the silver medal from “Dahmer – Monster: The Jeffrey Dahmer Story,” the biographical drama series starring “American Horror Story” actor Evan Peters. Previously the second most popular English-language series on Netflix, “Dahmer” reached 856.2 million hours in 28 days, whereas “Wednesday” only needed 21 days to become a smash hit. It took 60 days in total for “Dahmer” to exceed 1 billion viewing hours.

The achievement is notable for the streaming giant, especially after it lost over a million subscribers in 2022. The company finally gained 2.41 million subs in the third quarter. Also, during this year’s Emmy awards, Netflix fell behind rival HBO Max, only grabbing 26 wins versus HBO/HBO Max’s 37.

Netflix is among the top nominees for the 2023 Golden Globe Awards, earning 14 TV nominations and nine film noms. “Wednesday” nabbed two nominations, including Best Television Series (Comedy) and Ortega was nominated for Best Actress.

Is there a chance the show will win a Golden Globe? Most likely not. But having a family-friendly show be recognized at any award show is a big deal for Netflix, especially since the series is a runner-up against popular shows like “Abbott Elementary” and “Only Murders in the Building.”

It’s also important to point out that “Wednesday” is a spin-off, hence was guaranteed to draw in a bunch of nostalgic viewers. Yes, the show is brilliant and takes a creative spin on the 1964 TV series, as well as the 1991 and 2019 films. It’s also directed by Tim Burton, the iconic filmmaker behind “Beetlejuice,” “Edward Scissorhands” and “The Nightmare Before Christmas.” But unlike “Stranger Things” and “Squid Game,” which are completely different in their own wild ways, “Wednesday” copies an arguably overdone tactic that many streamers opt for–rebooting franchise after franchise until something sticks.

So while Netflix pulled it off this time around, the streaming giant needs to release more high-quality original series that have totally new concepts and characters if it wants to keep up with its rivals.

Netflix’s ‘Wednesday’ is the second most popular English-language series, with 1.02B hours viewed by Lauren Forristal originally published on TechCrunch

A year after it was banned by the Federal Trade Commission, a notorious phone surveillance company is back in all but name, a TechCrunch investigation has found.

A groundbreaking FTC order in 2021 banned the stalkerware app SpyFone, its parent company Support King, and its chief executive Scott Zuckerman from the surveillance industry. The order, unanimously approved by the regulator’s five sitting commissioners, also demanded that Support King delete the phone data it illegally collected and notify victims that its app was secretly installed on their device.

Stalkerware, or spouseware, are apps that are surreptitiously planted by someone with physical access to a person’s phone, often under the guise of family tracking or child monitoring, except that these apps are designed to stay hidden from home screens, all the while silently uploading the contents of a person’s phone, including their text messages, photos, browsing history, and granular location data.

But many stalkerware apps — like KidsGuard, TheTruthSpy and Xnspy — have security flaws that put thousands of people’s personal phone data at risk of further compromise.

That also includes SpyFone, whose unsecured cloud storage server spilled the personal data stolen from more than 2,000 victims’ phones, prompting the FTC to investigate and subsequently ban Support King and its CEO Zuckerman from offering, distributing, promoting, or otherwise assisting in the sale of surveillance apps.

Since then, TechCrunch has received further tranches of data, including from the internal servers of a stalkerware app called SpyTrac, which is run by developers with ties to Support King.

Meet Aztec Labs

With more than 1.3 million compromised devices, SpyTrac is one of the biggest known active Android stalkerware operations, surpassing the number of victims ensnared by TheTruthSpy more than threefold. Despite its vast international reach, U.S. visitors to SpyTrac’s website are blocked with an abrupt message stating that “your country is not supported.”

But SpyTrac is like any other stalkerware app, including its ability to stay hidden on a victim’s device. SpyTrac’s website also makes no mention of the individuals running the operation, likely to shield the developers from legal and reputational risks associated with running a stalkerware operation.

According to the data and other public records seen by TechCrunch, SpyTrac is managed by developers who work for both Support King and an outfit of developers called Aztec Labs, which builds and maintains the SpyTrac stalkerware operation. Aztec Labs also maintains a near-identical Spanish-language stalkerware app called Espía Móvil (which translates to “spy mobile”), and another clone stalkerware app called StealthX Pro, the data shows.

Some of the data found on SpyTrac’s server directly connects SpyTrac to Support King.

One of the server files contained a set of Amazon Web Services private keys that allow access to cloud storage associated with Support King and GovAssist, a website that claims to help immigrants obtain U.S. visas and permanent residency permits. The keys also allow access to cloud storage for OneClickMonitor, a clone stalkerware app that Support King shut down at the same time as SpyFone.

Both Support King and GovAssist are headed by chief executive Scott Zuckerman.

When reached by email, Zuckerman told TechCrunch: “We are investigating your claims that SpyTrac internal data was storing AWS keys that may be connected to S3 buckets relating to Support King, GovAssist, and OneClickMonitor. We take this very seriously and will comply with all provisions of the FTC Order.”

Access logs seen by TechCrunch show at least two Aztec Labs developers logging in to SpyTrac’s servers using different sets of credentials, but each from the same IP addresses. Both of the developers logged in from IP addresses registered to a Bosnian residential broadband provider using credentials associated with Aztec Labs, SpyTrac, and Support King email addresses.

One of the developers is Aztec Labs’ technical lead, whose LinkedIn says he is based in Sarajevo. His other public freelance portfolios list his work as a program manager at Support King, a role that he describes as “managing the entire IT team.”

According to LinkedIn profiles and other work portfolios, the technical lead and other SpyTrac developers also work on Zuckerman’s latest venture, GovAssist.

The access logs also show a third developer logging in to SpyTrac’s servers, also from their home IP address in Sarajevo, using different sets of credentials associated with Support King, Aztec Labs, and GovAssist email addresses.

In response, Zuckerman told TechCrunch: “Neither I, nor any of my businesses, are affiliated with Aztec Labs, SpyTrac, or [the technical lead, who] worked as an independent contractor for Support King between June 2019 and October 2021. Nor do we have access to SpyTrac’s servers.”

The SpyFone connection

SpyFone, the stalkerware app banned by the FTC in September 2021, no longer operates.

The internal SpyTrac data we have seen shows that SpyFone issued its last customer license just days before it was banned by the FTC. SpyFone’s domain name was sold to another phone surveillance maker, SpyPhone. Customers trying to log in to SpyFone’s web dashboard, used for accessing a victim’s stolen data, were redirected to SpyPhone’s website instead.

The FTC’s 2021 order also demanded that Support King delete the data it had illegally collected from SpyFone. But the internal SpyTrac data seen by TechCrunch still contains thousands of records associated with SpyFone licenses assigned to the email addresses of buying customers.

Every SpyFone license was sold by a reseller with a Support King email address, the data showed.

SpyTrac also came to the attention of security researchers Vangelis Stykas and Felipe Solferini, whose months-long research identified common and easy-to-find security flaws in several stalkerware families, including SpyTrac. Their findings, which they presented at BSides London this month, involved decompiling the apps and mapping out their server infrastructure using public internet data. Their evidence links SpyTrac to Support King.

Zuckerman said in response: “Support King deleted all data in its servers connected with SpyFone and OneClickMonitor customers pursuant to the FTC Order.”

A short time after TechCrunch contacted Zuckerman for comment, SpyTrac’s website went offline with a message saying the “product is temporarily not available.” The websites for SpyTrac’s clone stalkerware apps, StealthX Pro and its Spanish-language clone Espía Móvil, also went offline. Aztec Labs’ website also stopped loading.

Stalkerware is a difficult problem to combat. These operations are clandestine by design, making it difficult for regulators to investigate or know under whose jurisdiction they fall.

In 2020, the FTC took its first ever action against a stalkerware operator, Retina-X, which was hacked several times and later shut down. The FTC’s second action was against Support King a year later.

Companies that violate FTC orders can face considerable civil penalties. Earlier this year, Twitter was ordered to pay $150 million for violating an FTC order from 2011.

Instead, much of the effort against stalkerware and other commercial surveillance has been taken up by the tech industry, including device makers Apple and Google, which have banned stalkerware apps. In 2020, Google also banned ads in its search results that promote stalkerware. Anti-malware providers who are members of the Coalition Against Stalkerware, which launched in 2019 to support victims and survivors of stalkerware, collectively share signatures of known stalkerware apps and networks to block them from working on their customers’ phones.

A former FTC attorney, who reviewed our findings ahead of publication, told TechCrunch that the evidence points to a likely breach of the FTC’s ban. As to whether Support King broke its agreement with the FTC will ultimately be for the agency to decide.

When reached, a spokesperson for the FTC declined to comment.

If you or someone you know needs help, the National Domestic Violence Hotline (1-800-799-7233) provides 24/7 free, confidential support to victims of domestic abuse and violence. If you are in an emergency situation, call 911. The Coalition Against Stalkerware also has resources if you think your phone has been compromised by spyware. You can contact this reporter on Signal and WhatsApp at +1 646-755-8849 or zack.whittaker@techcrunch.com by email.

Read more:

Xnspy stalkerware spied on thousands of iPhones and Android devices
KidsGuard stalkerware app leaked phone data from thousands of victims
Inside TheTruthSpy, the stalkerware network spying on thousands
TheTruthSpy exposed: Check if your Android device was compromised
Your Android phone could have stalkerware, here’s how to remove it

Support King, banned by FTC, linked to new stalkerware operation by Zack Whittaker originally published on TechCrunch

When you look at Adobe and Salesforce, while there are many differences, they compete directly in some areas. And when you consider their overall performance, the numbers weren’t all that different in their most recent earnings reports:

For Adobe:

Revenue of $4.53 billion, which was right in line with analysts’ expectations, up 10%, which translates to 14% in constant currency if the dollar weren’t so strong it was dragging down overseas earnings numbers.

For Salesforce:

Revenue of $7.8 billion, compared with $7.2 billion expected by the analyst class. That was up 14%, or 19% in constant currency.

On its face, that’s pretty darn similar, yet Salesforce’s stock price has gotten slammed since it revealed its results. On Friday, the day after Adobe announced its most recent results, its stock closed up nearly 3%.

To be fair, Salesforce did drop the bombshell news that Bret Taylor was leaving at the same event, which may have spooked investors some, but Adobe’s 10% number isn’t exactly something to scream from the rooftops.

In fact, it’s dangerously close to single-digit growth doldrums, a place no public company wants to be living (except perhaps IBM). But Adobe has a couple of things going for it that Salesforce doesn’t. The first is that it’s diversifying its income in a big way, which should help as we enter the new year amid ongoing economic turbulence.

While the vast majority of the revenue still comes from the creative side of the house, as Adobe celebrates its 40th anniversary, we are starting to see long-term bets that CEO Shantanu Narayen made on marketing starting to pay off. That includes the $4.75 billion Marketo acquisition and the $1.6 billion Magento acquisition, both of which occurred in 2018.

The company also announced that Experience Cloud, which includes marketing tools and analytics products, reached $1 billion for the quarter for the first time — $1.15 billion, to be precise.

Brent Leary, founder and principal analyst at CRM essentials, who watches the marketing and sales markets closely, said it’s a big milestone for Adobe.

“I think most people still think of Photoshop, Illustrator and all the rest of the Creative Cloud apps, but Experience Cloud hitting this milestone illustrates the importance of using those tools to create and manage customer experiences to build deep, long-lasting relationships with them.

“Experience Cloud gets to come out of the shadows of Creative Cloud a bit,” Leary told TechCrunch.

And speaking of diversifying, investors may not have liked Figma’s $20 billion price tag when it was announced, but they seem to be settling into the idea of it becoming part of the company. Of course, the deal still has to clear significant regulatory hurdles in the U.S. and abroad before it becomes a reality.

Yet even without that, let’s face it: Figma revenue is not going to move the needle all that much in the short term, and Adobe is doing pretty well. But let’s take a closer look at these two reports and see if they are as similar as they appear at first glance and try to parse why Adobe is getting more favorable investor treatment.

Why did Wall Street favor Adobe’s quarter over Salesforce’s? by Ron Miller originally published on TechCrunch

Yesterday, we had the chance to catch up with Fabrice Grinda, a serial entrepreneur who co-founded the free classifieds site OLX — now owned by Prosus — and who has in recent years been building up his venture firm, FJ Labs. He often likens the outfit to an angel investor “at scale,” saying that like a lot of angel investors, “We don’t lead, we don’t price, we don’t take board seats. We decide after two one-hour meetings over the course of a week whether we invest or not.”

The outfit, which Grinda cofounded with entrepreneur Jose Marin, has certainly been busy. Though its debut fund was relatively small — it raised $50 million from a single limited partner in 2016 — Grinda says that FJLabs is now backed by a wide array of investors and has invested in 900 companies around the world by writing them checks of between $250,000 and $500,000 for a stake of typically 1% to 3% in each.

In fact, the data provider Pitchbook recently ranked FJ Labs the most active venture outfit globally, just ahead of the international outfit SOSV. (You can see Pitchbook’s rankings at page bottom.)

Yesterday, Grinda suggested that the firm could become even more active in 2023, now that the market has cooled and founders are more interested in FJ Lab’s biggest promise to them — that it get them follow-on funding come hell or high water through the connections of Grinda and his partners. Indeed, while that promise was probably less interesting in a world awash with capital, it has likely become more compelling as investors pull back and founders find themselves facing fewer options. Excerpts from our wide-ranging chat with Grinda follow, edited lightly for length.

TC: You’re making so many bets in exchange for a very small stake. Meanwhile you’ve bet on companies like Flexport that have raised a lot of money. You’re not getting washed out of these deals as they raise round after round from other investors?

FC: It’s true that you sometimes go from 2% to 1% to 0.5%. But as long as a company exits at 100 times that value, say we put in $250,000 and it becomes $20 million, that’s totally fine. It doesn’t bother me if we get diluted on the way up.

When making as many bets as FJ Labs does, conflicts of interest seem inevitable. What’s your policy on funding companies that might compete with one another?

We avoid investing in competitors. Sometimes we bet on the right or the wrong horse and it’s okay. We made our bet. The only case where it does happen is if we invest in two companies that are not competitive that are doing different things, but one of them pivots into the market of the other. But otherwise we have a very Chinese Wall policy. We don’t share any data from one company to the others, not even abstracted.

We will invest in the same idea in different geographies, but we will clear it by the founder first because, to your point, there are many companies that attract the same markets. In fact, we may not take a call when a company is in the pre-seed or seed-stage or even A stage if there are seven companies doing the same thing. We’re like, ‘You know what? We’re not comfortable making the bet now, because if we make a bet now, it’s our horse in the race forever.’

You mentioned not having or wanting board seats. Given what we’re seen at FTX and other startups that don’t appear to have enough experienced VCs involved, why is this your policy?

First of all, I think most people are good-intentioned and trustworthy so I don’t focus on protecting the downside. The downside is that a company goes to zero and the upside is that it goes to 100 or 1000 and will pay for the losses. Are there cases where there has been fraud in lining the numbers? Yes, but would I have identified it if I sat on the board? I think the answer is no, because VCs do rely on numbers given to them by the founder and what if someone’s giving you numbers that are wrong? It’s not as though the board members of these companies would identify it.

My choice not to be on boards is actually also a reflection of my personal history. When I was running board meetings as a founder, I did feel they were a useful reporting function, but I didn’t feel they were the most interesting strategic conversations. Many of the most interesting conversations happened with other VCs or founders who had nothing to do with my company. So our approach is that if you as a founder want advice or feedback, we are there for you, though you need to reach out. I find that leads to more interesting and honest conversations than when you’re in a formal board meeting, which feels stifled.

The market has changed, a lot of late-stage investment has dried up. How active would you say some of these same investors are in earlier stage deals?

They’re writing some checks, but not very many checks. Either way, it’s not competitive with [FJ Labs] because these guys are writing a $7 million or a $10 million Series A check. The median seed [round] we see is $3 million at a pre-money valuation of $9 million and $12 million post [money valuation], and we’re writing $250,000 checks as part of that. When you have a $1 billion or $2 billion fund, you aren’t going to be playing in that pool. It’s too many deals you’d need to do to deploy that capital.

Are you finally seeing an impact on seed-stage sizes and valuations owing to the broader downturn? It obviously hit the later-stage companies much faster.

We’re seeing a lot of companies that would have liked to raise a subsequent round — that have the traction that would have easily justified a new outside round a year or two or three years ago — having to instead raise a flat, internal round as an extension to their last round. We just invested in a company’s A3 round — so three extensions at the same price. Sometimes we give these companies a 10% or 15% or 20% bump to reflect the fact that they’ve grown. But these startups have grown 3x, 4x, 5x since their last round and they are still raising flat, so there has been massive multiples compression.

What about fatality rates? So many companies raised money at overly rich valuations last year and the year before. What are you seeing in your own portfolio?

Historically, we’ve made money on about 50% of the deals we’ve invested in, which amounts to 300 exits and we’ve made money because we’ve been price sensitive. But fatality is increasing. We’re seeing a lot of ‘acqui-hires,’ and companies maybe selling for less money than was raised. But many of the companies still have cash until next year, and so I suspect that the real wave of fatalities will arrive in the middle of next year. The activity we’re seeing right now is consolidation, and it’s the weaker players in our portfolio that are being acquired. I saw one this morning where we got like 88% back, another that delivered 68%, and another where we got between 1 and 1.5x our money back. So that wave is coming, but it’s six to nine months away.

How do you feel about debt? I sometimes worry about founders getting in over their heads, thinking it’s comparatively safe money.

Typically startups don’t [secure] debt until their A and B rounds, so the issue is usually not the venture debt. The issue is more the credit lines, which, depending on the business you’re in, you should totally use. If you’re a lender for instance and you do factoring, you’re not going to be lending off the balance sheet. That’s not scalable. As you grow your loan book, you would need infinite equity capital, which would lead you to zero. What usually happens if you’re a lending business is you initially lend off balance sheet then you get some family offices, some hedge funds, and eventually a bank line of credit, and it gets cheaper and cheaper and scales.

The issue is in a rising-rate environment, and an environment where perhaps the underlying credit scores — the models that you use — are not as high and not as successful as you’d think. Those lines get pulled, and your business can be at risk [as a result]. So I think a lot of the fintech companies that are dependent on these credit lines may be facing an existential risk as a result. It’s not because they took on more debt; it’s because the credit lines they used might be revoked.

Meanwhile, inventory-based businesses [could also be in trouble]. With a direct-to-consumer business, again, you don’t want to be using equity to buy inventory, so you use credit, and that makes sense. As long as you have a viable business model, people will give you debt to finance your inventory. But again, the cost of that debt is going up because the interest rates are going up. And because the underwriters are becoming more careful, they may decrease your line. They may call it, in which case your ability to grow is basically shrinking. So companies that depend on that to grow quickly are going to see themselves extremely constrained and are going to have a hard time and on a go-forward basis.

The most active global VC firm on deal terms, fatality rates and the drawbacks of credit lines by Connie Loizos originally published on TechCrunch

To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PDT, subscribe here.

Fridaaaaaaaay! Today we particularly enjoyed the Equity podcast team’s 2023 predictions on the future of building, crypto, and AI.

Meanwhile, good luck to Alex (who mostly looks after TechCrunch+ these days, but he used to write the Daily Crunch and still occasionally groans at our awful jokes) as he embarks on parenthood and is taking a couple of months off to do whatever new parents do.

Oh, and still working on your holiday shopping list? Here’s a great gift idea for yourself and other early-stage and soon-to-be founders. Grab a Founder pass to TC Early Stage 2023 for just $75 by registering with this link before 11:59 p.m. PST on December 31.

Finally, we’re excited to see the back of another week. Time for some well-deserved R&R here at Crunch Towers — see y’all next week! — Christine and Haje

The TechCrunch Top 3

What a tangled web Elon Musk weaves: Lots of Twitter news to parcel out today, so we’ve grouped it all together. The top Twitter trove came from Paul, who wrote that Twitter pulled its Spaces group audio feature following a Spaces where Musk talked to banned journalists. You can find out more about the banning from Taylor. Meanwhile, that was just one of the many moves the Chief Twit made, including suspending Mastodon’s account, Taylor writes.
Meanwhile, over in Europe: Natasha L reports that European Union lawmakers sent a warning to Elon Musk, via Twitter of course, about sanctions that could be made after Twitter suspended the accounts of journalists without warning.
Second time may be the charm: The “Black Adam” movie, starring Dwayne “The Rock” Johnson, wasn’t embraced by theater-goers, but HBO Max now has it streaming in hopes of a different outcome, Lauren reports.

Startups and VC

Despite shrinking investment into startups in 2022, venture capital funds of all sizes are still being raised. However, not many of these are led by solo general partners (GPs), and although that trend is on the rise, even fewer are led by women or people who don’t come from venture capital, Anna writes. That makes Nichole Wischoff something of an exception: Her solo venture capital firm Wischoff Ventures closed a second fund of $20 million, a sizable increase from her first $5 million fund. Her target is to invest in 25 to 30 U.S. startups at the pre-seed or seed stage.

Five more to take you into the weekend… And if you need a creative boost, this stop-motion animation music video will probably do the trick.

Spilling over: Twitter is a mess, Amanda writes, so former employees are creating Spill as an alternative.
Boxing up those forms: Dropbox buys form management platform FormSwift for $95 million in cash, reports Kyle.
Getting the ROI for your CPG: Christine wrote about Kuona, a startup that bagged $6 million to show you which promotions bring ROI and which don’t.
Shining ever so brightly: Tage writes about a provider of solar energy products in Africa and Asia, Sun King, who expanded its Series D to $330 million.
Investing the Venn diagram of biotech and AI: Anna explores what biotech investors are looking for in 2023.

The rules of VC are changing: Here’s what founders should be considering in the new era

“Growth at all costs” is a fairy tale made possible by cheap money that helped venture capitalists set expectations for founders — and each other — for years.

Similarly, everyone needs 18 to 24 months of runway is a nice motto, but if it takes three times as long to raise a round as it used to, it may no longer be good advice.

“These ‘VCisms’ borne out of an era of plenty have permeated boardrooms and investor meetings everywhere,” writes Neotribes Ventures partner Rebecca Mitchem in TC+.

In a data-driven piece that looks at post-money valuations, deal size and dilution going back to 2012, Mitchem says we’re now heading into a “growth at reasonable costs” era.

Founders can continue to water down their ownership by continuing to raise fat rounds, or they can decide to grow more slowly, which leaves VCs with a larger stake over time.

“While it may feel counterintuitive, given the recent market environment, the value of the equity for all parties — investors, founders and employees — in this scenario is higher in the more conservative growth scenario,” says Mitchem.

Three more from the TC+ team:

Moar money, moar startups: With IT spending forecast to rise in 2023, what does it mean for startups? by Ron.
Getting your foot in the door: Haje shares some tips for startup founders on how to get your first investor meeting.
Biotech meets AI: Anna spoke to six investors to figure out why AI is more than just a buzzword in biotech.

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.

Meta is doing a lot of shutting down lately. Facebook’s parent recently shut down its live shopping feature in October, and now Aisha writes that it is shutting down its Super app in February. If you are not familiar, she writes that it was an app initially created to provide “a virtual meet and greet experience that was similar to what you experience at a real-life event like VidCon or Comic-Con.” We guess it didn’t catch on as well as they would have liked…

And we have five more for you:

Get your geek on: Amazon has acquired the film and television rights to the hugely popular tabletop war game Warhammer 40,000, reports Lauren.
Your ticket to ride might be driverless: Waymo opens Phoenix airport rides to the public and doubles its downtown service area, Rebecca writes.
Elon Musk gives an early Christmas present: Tesla Powerwall customers in Texas can now sell their electricity back to the grid, Harri reports.
Seeing the music, not just hearing it: We enjoyed Devin’s story on Riffusion, an AI model that composes music by visualizing it.
Get out your gig worker pitchforks: Rebecca writes that “the battle over gig worker status is heating up.”

Daily Crunch: Twitter removes live audio chat after CEO joins Space with banished reporters by Christine Hall originally published on TechCrunch

This week, I talked with Tim De Chant about his coverage of fusion energy and what feels like a rare hopeful story in renewable energy tech. And Jacquelyn Melinek walks us through Sam Bankman-Fried’s alleged crimes and confirmed arrest. Plus, as always, we go over the top stories in tech from the week

Articles from the episode:

World-record fusion experiment produced even more energy than expected
FTX founder Sam Bankman-Fried has been arrested in the Bahamas
US attorney says ‘we are not done’ charging individuals for FTX collapse

Other news from the week:

Instagram adds text updates with new Notes feature
OpenAI’s attempts to watermark AI text hit limits
Elon Jet, the Twitter account tracking Elon Musk’s flights, was permanently suspended

SBF doesn’t need SPF where he’s going and other TC news by Darrell Etherington originally published on TechCrunch

U.S. safety regulators have opened a preliminary investigation into the robotaxis developed and operated by GM self-driving subsidiary Cruise.

The National Highway Traffic and Safety Administration said it opened the investigation after learning of incidents when these robotaxis “may have engaged in inappropriately hard braking or became immobilized while operating on public roads.” The preliminary investigation covers all Cruise AVs.

Reuters was the first to report the formal safety probe.

Cruise has received the proper permits from California regulators to operate and charge for driverless rides in certain areas of San Francisco. The company is awaiting the last remaining approval from the state’s Public Utilities Commission to expand its service area to all of San Francisco.

As Cruise has ramped up its driverless operations, so has the public’s attention. While numerous videos and posts focus on the thrill of riding in a driverless car, not all of the public’s documentation has been positive. Numerous videos and images have been posted on social media, Reddit and other public forums documenting Cruise robotaxis seemingly stuck in intersections and blocking traffic in San Francisco.

However, NHTSA didn’t learn of the hard-braking crash events from social media. Cruise reported the events via the agency’s Standing General Order, which requires manufacturers to report certain crashes involving vehicles equipped with automated driving systems or SAE Level 2 advanced driver assistance systems. This is the third investigation NHTSA has opened into an automated driving systems developer; the first two were for Pony.ai (a recall query and an audit query), according to the agency. There have been multiple investigations into Tesla’s advanced driver assistance system.

NHTSA said three hard-braking crashes were reported by Cruise through the Standing General Order. Two crashes involved injuries. Cruise said in all three of these incidents, the vehicle was supervised, which means there was a trained safety operator behind the wheel. None of the incidents resulted in police citations, according to the company.

Cruise also said it has already met with NHTSA to discuss each one of the events mentioned in their filing, and provided the agency with briefings and the information they requested. The agency said the investigation was launched to determine the scope and severity of the potential problem and fully assess the potential safety-related issues posed by these two types of incidents.

“Cruise’s safety record is publicly reported and includes having driven nearly 700,000 fully autonomous miles in an extremely complex urban environment with zero life-threatening injuries or fatalities,” Cruise spokesperson Hannah Lindow wrote in an emailed statement to TechCrunch. “This is against the backdrop of over 40,000 deaths each year on American roads. There’s always a balance between healthy regulatory scrutiny and the innovation we desperately need to save lives, which is why we’ll continue to fully cooperate with NHTSA or any regulator in achieving that shared goal.”

Lindlow noted that in each of these instances, the robotaxi was predicting and responding to the behavior of aggressive or erratic road actors, and was working to minimize collision severity and risk of harm.

NHTSA didn’t provide further insight into the cases of immobilized Cruise vehicles. However, Cruise told TechCrunch that the company designed its technology to err on the side of being conservative. Whenever the technology isn’t extremely confident in how to proceed, the vehicle will turn on hazard lights and come to a safe stop. If needed, Cruise personnel are physically dispatched to retrieve the vehicle as quickly as possible, the company said, adding this is rare and has not resulted in collisions.

The robotaxi may become immobilized because a door is left open, there’s an issue with vehicle hardware or software or there is an out-of-ordinary external event on the road like a spontaneous fireworks display in the street, according to the company. A spokesperson said the company communicates with the CPUC and the state’s Department of Motor Vehicles, the agency that regulates autonomous vehicles, around how, why and when it does this.

Cruise’s autonomous driving tech comes under scrutiny from safety regulators by Kirsten Korosec originally published on TechCrunch

Wow, that was quick.

When Elon Musk bought Twitter and took it private in October, I figured we’d have a while before things took a turn. Then, after he laid off about half the company’s employees, that estimate shortened a bit.

Now, after last night’s Spaces brouhaha, during which Musk confronted journalists he banned for retweeting links about the ElonJet tracker and then abruptly killed the feature entirely, that timeline has moved up considerably.

To be clear: Twitter isn’t going to die tomorrow or next week or even next year. But given how the last few days have gone on the platform, I’m not quite sure how long Twitter will remain a viable platform. It’s turning into the China of social media, full of censorship, arbitrary bans and groups of users/accounts that leap to Musk’s defense whenever they feel his narrative is being undermined.

Censorship, lockdowns, arbitrary bans — Twitter is turning into the China of social media by Tim De Chant originally published on TechCrunch

Despite shrinking investment into startups in 2022, venture capital funds of all sizes are still being raised. However, not many of these are led by solo general partners (GPs), and although that trend is on the rise, even fewer are led by women or people who don’t come from venture capital.

The above makes Nichole Wischoff something of an exception: Her solo venture capital firm Wischoff Ventures closed a second fund of $20 million, a sizable increase from her first $5 million fund. Her target is to invest in 25 to 30 U.S. startups at the pre-seed or seed stage.

Wischoff purposely capped her previous fund because she was still working full-time until March as a startup operator, she told TechCrunch. Now that she is solely dedicated to her fund, she plans to write larger checks of up to $1 million, up from a previous $300,000 cap.

This new fund will also be “leaning in heavily on B2B,” Wischoff said. “I tell people I invest in unsexy businesses!”

She’s particularly interested in companies that apply an AI/ML or embedded fintech component to large legacy industries. “However, I have a very big soft spot for industrial automation. Everything that makes up the majority of the GDP in the U.S., I am very interested in.”

Beyond fintech

Wischoff’s existing portfolio includes companies such as Coast Pay, Loop, Nuvo, Trustlayer and Vesta – a heavy fintech leaning owing to Wischoff’s background. However, the second is set to broaden this scope. “I know fintech well, but I don’t want to be pigeonholed into fintech,” she said.

Before becoming a solo GP, Wischooff was an early employee at lending platform Blend Labs, which went public in 2021, and part of the founding team at One Finance, a neobank acquired by Walmart earlier this year.

One’s acquisition resulted in a “huge financial outcome” for Wischoff, which led her first into angel investing while working at construction fintech Builtbefore launching her own fund with external LPs.

Backers of this new fund include Peter Thiel, Lee Fixel, Yahoo co-founder Jerry Chen, Bain Capital, Byers Capital, Cendana Capital, Crossover, Insight Partners and others.

Several of these angels and funds had also backed Wischoff’s first fund, but the profile of her limited partners (LPs) has evolved over time.

According to a summary of an analysis that Wischoff conducted, family offices now account for more than half of her second fund, compared to about a third of her first fund. For instance, her most recent fund is backed by Four More Capital, the family office of late American industrialist and philanthropist Henry Crown.

“I wish VCs were more open about their LP construction,” Wischoff said in an email. In the same transparency spirit, she added that it took her seven months to raise her second fund, compared to two months for the first one.

The first investment out of her second fund went to Stell, a engineering-focused startup founded by two women with a background in aerospace and defense, whose goal is to help hardware engineers and buyers “reduce defects and get parts faster.”

If Wischoff’s next investments are anything like Stell, her portfolio might be on track to support what she describes as “American dynamism … the real one”— a topic we plan to explore with her shortly in a separate interview.

Solo GP Nichole Wischoff raises $20M fund backed by Peter Thiel to invest in ‘unsexy businesses’ by Anna Heim originally published on TechCrunch