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Musk's xAI shows there's more money on the sidelines for AI startups | TechCrunch

April 29, 2024 8:27 PM0


We’re off to an AI-heavy start to the week. OpenAI has a new deal with the Financial Times that caught our eye. Sure, it’s another content licensing deal, but there appears to be a bit more in the tie-up than just content flowing one way, and money the other.

On this early-week episode of Equity, we also dug into the xAI news that TechCrunch broke recently; namely that Musk’s AI enterprise is not looking to raise $3 billion on a $15 billion valuation. No, it’s now looking for $6 billion at an $18 billion valuation. That’s a lot of capital.

But there was even more to chat about, including the EU handing Apple even more bad news in the form of placing iPadOS under its DMA rules that should force third-party app stores on the tablet line in time. And Tesla got some good news in China, though just how impactful it will prove is not 100% certain at this juncture.

And to close out, the Times has a fascinating look at pace at which venture capitalists are putting money into AI startups. Given the ability of OpenAI to land big deals with Microsoft money, I wonder if it is enough?

Equity is TechCrunch’s flagship podcast and posts every Monday, Wednesday and Friday, and you can subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

You also can follow Equity on X and Threads, at @EquityPod.

For the full interview transcript, for those who prefer reading over listening, read on, or check out our full archive of episodes over at Simplecast.




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London's first defense tech hackathon brings Ukraine war closer to the city's startups | TechCrunch

April 28, 2024 4:23 PM0


Last week, the UK announced its largest ever military support package for Ukraine. The bill takes the U.K.’s total support for this financial year to £3 billion — not quite the $50 billion the US pledged recently, but still substantial.

But while most of those funds will be spent on very traditional military hardware, a new tech initiative launched last weekend was aimed at enhancing Ukraine’s asymmetric warfare capabilities against Russia. In fact, the London Defense Tech Hackathon was the first-ever event to bring together some of the UK’s brightest minds in technology, venture capital, and national security in a military setting. The idea was to hack together ideas to both assist Ukraine and also to create a far more porous layer between the worlds of fast-paced civilian tech and the very different world of the military. 

Put together by Alex Fitzgerald of Skyral and Richard Pass of Future Forces, the two were joined by co-organizers that included the Honourable Artillery Company,  Apollo Defense, Lambda Automata and D3 VC among others.

The event brought together developers skilled in both hardware and software to foster innovation in defense, national security, and deeptech. There was a key focus on drones and their applications on the battlefield, both the hardware and the electronic systems needed to fly them to their targets and counter-drone systems. 

As most observers of the war have pointed out, this war has taken on a completely new dimension compared to previous wars. Today, drones and electronic countermeasures are the order of the day, as Ukraine has endeavored to fight off Russia, a much larger aggressor, with asymmetric methods. 

Fitzgerald told me: “There are three groups of people coming to these events. There’s the builders, investors, and the military. I think for everyone, it’s trying to convince their colleagues to think more about defense technology as an option to either build or invest in.”

He explained that there were two main tracks of work: electronic warfare and drone or aerial systems: “There’s an acronym I learned from someone cleverer than me, which is that the future of defense technologies comes small, cheap  and uncrewed.”

He explained that one main aim was to get people who had traditionally not been involved in defense either building for or investing in defense: “We’ve got people like the NATO Innovation Fund, the UK National Security Strategic Investment Fund. So yeah, it’s a mix of people who already invest in defense or who haven’t thought about investing before.”

He chose the hackathon format because “the focus is on getting stuff done. Get actual builders, not to just talk about building, because that’s actually where most of the innovation is happening.”

One of the inspirations for the event was the recent El Segundo, Calif., defense tech hackathon in February of this year.

“I think the key thing with military technology is making it as easy to use and as powerful as some of the the consumer technology that’s been built,” said Fitzgerald “There’s the classic line, ‘There’s more AI in a snap in Snapchat than there is often some most modern military systems.’” 

Also attending the event was Catarina Buchatskiy, representing Apollo Defense.  As engineers pored over cameras, Starlinks, and drones, she told me: “Defense tech is a difficult industry to enter. And it’s a difficult market to break into, for obvious reasons. We’ve found Hackathons an extremely exciting way for people to get involved because defense technology can seem like a giant black box of contracts that take 10 years, and technologies that are built [are often] hidden from the public eye. At a hackathon, you have 24 hours. Make something really cool.”

 

Interceptor done

She said the firm had seen “a lot of success” with the El Segundo event.  

“We just realized that if people think it’s something that’s accessible to them [and] can do something quickly and make an impact, they want to participate,” she told me.

Buchatskiy, who is Ukrainian, also spoke powerfully about Ukraine: “These are very real things to me. When I say that I need a drone detector, it’s because I’m looking at one outside my window that we didn’t detect in time and it is going to kill my neighbor. That is the reality that we face.”

She added that it’s important for hackathon attendees to know “that they’re building for someone and this could actually save my family’s life.”

Despite the controversy surrounding defense technology in some quarters, she added, “To be involved in technology is to be interested in a better future. And I really, truly can’t think of a more interesting and better future than one that’s safe and one where we can guarantee peace.”

NATO, in the shape of the NATO Investment Fund, a fund with a billion euros to invest in defense tech over the next few years, was also represented. 

Fund partner Patrick Schneider-Sikorsky told me the fund was set up to back startups “that bolster our collective defense security and resilience. We invest in dual-use deep tech, but the fund was conceived before the war in Ukraine. The conflict has now very much impacted our investment thesis and we’re keen to invest in defense technologies that can make Europe safer and more secure.”

But why was NATO funding a hackathon?

“I think defense tech is new to a lot of a lot of founders and a lot of developers,” Schneider-Sikorsky said. “It’s not that easy for them to understand the problem statements and the challenges and also to get access to the end users.”

He said the hackathon format particularly lends itself to that: “It would normally, for many founders, take them months if not years to get in touch with the right people at defense ministries, and a lot of them are here today. So hopefully it will accelerate things substantially.”

Another attending investor, Alex Flamant from HCVC, told me: “There was a need for people in Europe to invest in proper defense technologies. It seemed from the investor standpoint, there’s restrictions around certain investors investing. One of the goals of this is to demystify what a lot of this is amongst young builders, and really to get people more aligned with the big mission that we’re all on.”

Machine learning specialist was there to focus on drone detection: “That’s in our machine vision and object detection knowledge. Ukraine are fighting for the whole of Europe at the moment and obviously the UK is pivotal to that. It’s essential that we that we ally with them and utilize what we have to help.”

The hackthon came at a time of increased tension around the use of technologies in defense. 

Google recently fired 28 employees after their sit-in protest over the controversial Project Nimbus contract with Israel, for instance.

However, defense is clearly rising up the tech agenda.

Anduril recently moved ahead in a Pentagon program to develop unmanned fighter jets, and more broadly as we learned last year, venture capital is opening the gates for defense tech. 

And in the UK, there is much talk about how high-powered lasers could be among the next wave of weapons. The DragonFire weapon is said to be precise enough to hit a £1 coin from a kilometre away, according to the MoD, and cost barely $15 to fire. 

The projects to emerge from the hackathon may not have been not quite so sci-fi, but they were pretty damn close. How about a “High Speed Interceptor to take down Orlan Drones”? And at least they are likely to be deployed a lot sooner than a laser gun. 

 




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Will a TikTok ban impact creator economy startups? Not really, founders say | TechCrunch

April 28, 2024 2:35 AM0


President Joe Biden signed a bill on Wednesday that could ban TikTok – for real this time. After so many false starts and stops, some creator economy founders and their clients are rolling their eyes. They’ve been through this before.

“I think two years ago, this would have been devastating,” Karat Financial co-founder and co-CEO Eric Wei told TechCrunch. “Now… Eh.”

When creators succeed, the startups that work in the creator economy generally succeed as well. Still, Wei isn’t particularly concerned that the friction from a TikTok ban would impact his business, a Series B startup that provides financial services to creators.

“If you build products in startups that help creators make money, then actually, from an addressable market point of view, this is good for you,” Wei said. “Your framing can be like, ‘TikTok is gone, as a creator, you need to be thinking about diversifying and how to support yourself, so here’s XYZ things you can do.’”

The threat of the TikTok ban feels a bit like “The Boy Who Cried Wolf,” even though this time, it’s different. This isn’t just political theater in the form of ongoing Senate hearings. This bill, which would force ByteDance to sell TikTok if it can’t find an American buyer within nine months, made its way through the House and the Senate to Biden’s desk, where he signed it into law.

But the creator landscape looks different now than it did in 2020, when former President Donald Trump tried banning the Chinese-owned app (and, as he runs for president again, he now says he’s opposed to the ban, because it would give Meta too much power). Established creators have had about three years of legal back-and-forth and two different presidencies to prepare their businesses for a world without TikTok.

As Wei scrolls through a large group chat he’s in with other creators, he notes that no one’s too panicked.

“I’m looking through, and there’s some jokes – one guy jokes, ‘My Snapchat shares are about to pop,’ and another said, ‘Let’s make a skit: when TikTokers protest the TikTok ban – who’s in?’” he said. “A third says, ‘TikTok’s about to sue, I’ve been talking with their internals,’ and a fourth one replied, ‘Where’s my popcorn?’”

This isn’t the case for all kinds of creators. Wei notes that TikTok livestreamers and creators that monetize via TikTok Shop could be hit the hardest, since platforms like YouTube Shorts and Instagram Reels aren’t as invested in those features as TikTok. The ban could also be detrimental to politically-oriented creators, since Instagram Reels isn’t a viable alternative for them – the Meta-owned platform has begun limiting the reach of political content. And while the more established creators in Wei’s group chat have been preparing for this for years, the transition away from TikTok could be a huge gut-punch to newer creators who don’t have followings on multiple platforms yet.

“To be clear, no one’s like, ‘This is good for us!” Wei said. But the amount of time creators have had to prepare for this moment has made them better poised to weather the storm.

“This is something that’s been talked about for a very long time, so creators are aware – this is not new,” Harry Gestetner, co-founder and CEO of creator monetization platform Fanfix, told TechCrunch. “The second thing is, this is not an overnight ban. Creators still have about a year to transfer their following, so I am optimistic.”

James Jones – the CEO of Bump, another financial services company for creators – is looking at the situation in parallel.

“There will undoubtedly be a ripple effect amongst the creator community as a result of the TikTok ban,” Jones told TechCrunch. “But creators are getting better at diversifying the ways that they monetize across multiple platforms. We’ve also seen this movie before in the case of Vine, which paved the way for TikTok to fill the void that it left.”

TikTok’s secret sauce is its power to help creators get discovered – more so than other platforms, anyone can blow up on the For You Page. But while Instagram Reels and YouTube Shorts could have been likened to “Kirkland brand TikTok” in 2021, the platforms have since matured.

In TikTok’s initial Creator Fund, a static pool of money distributed among a growing number of eligible creators, few people were supporting themselves on TikTok views alone. This has only recently changed as TikTok transitioned creators into its Creativity Program, which offers a better deal to eligible creators – but not all creators are making videos that fit the bill for that program. So, to make content creation a stable career, they’d have to transition onto other platforms anyway. YouTube Shorts has started sharing ad revenue on short-form videos, similar to its longstanding Partner Program, while Instagram Reels only has occasional, unreliable bonus programs.

Gestetner told TechCrunch that some creators he works with have been disillusioned by TikTok anyway.

“The problems with TikTok go past just the ban,” he said. “Creators so often get their accounts removed on TikTok, or get shadow banned, or get reported, and it’s very difficult to get an answer from TikTok. So we’ve dealt with problems there for years now.”

It’s not as though other platforms don’t share these transparency issues. But these risks have made it essential for creators to not put all their energy into one platform.

“Five years ago, creators were generally on one platform,” he said. “Now, every creator has a minimum of three, and up to five, six or seven platforms they use.”

This necessity of diversification extends beyond just the platforms creators use. Creators also need to generate income from a variety of sources, whether that be through fan memberships, product sales, live performances or courses.

“I think on our business, there will be no impact, or potentially kind of a positive impact,” Gestetner said. “It helps our case, because creators are all skeptical of the big platforms, and they don’t want all of their monetization to be tied to a particular platform.”

In theory, the ban on TikTok could create room in the market for another short-form video app – perhaps one that is not owned by a massive corporation like Meta or Google. But this likely won’t pose another situation like what happened when Elon Musk bought Twitter, and several microblogging apps cropped up seemingly overnight.

“I think a really good example of this is like, remember Triller?” Wei said. “For a while, we were all excited about it, like ‘Oh my god, TikTok’s going away, let’s put money toward Triller!’ But then everyone realized TikTok is not going away. And now it’s years later, and does anyone talk about Triller anymore?”

Well, they might not be talking about Triller either because the company is a walking red flag. In any case, creators won’t have the patience to invest in a nascent platform that might not last, so they’ll have to make due with Instagram, YouTube and Snapchat. That doesn’t mean TikTok won’t be missed, though.

“I think the fans will be affected the most overall,” Gestetner said. “But I do think the Shorts experience and Reels experience is getting very good.”

Gen Z is losing its political voice on social media


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Givebutter is turning a profit making tech for nonprofits | TechCrunch

April 27, 2024 9:45 PM0


Givebutter started in a George Washington University dorm room in 2016 as a software solution to make nonprofit fundraising more transparent and fun. Eight years later, the company is profitable and it just raised $50 million to scale as momentum for nonprofit-focused startups appears to be growing.

The company’s co-founder and CEO, Max Friedman, fundraised for a variety of organizations in college, ranging from raising for GW’s Greek life to raising for national nonprofits like TAMID. Friedman told TechCrunch that regardless of the size or scope of the organization he was fundraising for, they all had the same problem: They all used a disjointed mix of one-solution tech software that didn’t really make the process better and often came with hidden fees.

“We realized that nonprofits are using a lot of different tools to solve different pain points, and what we can do for the sector is bringing it all under one roof,” Friedman said. “It exists in restaurants and in e-commerce; there [was] no Shopify or Toast for nonprofits.”

The result was Givebutter, a CRM platform for nonprofits that strives to be transparent and all-encompassing. It features marketing resources, ways to track donors, fundraising tools for a variety of different strategies, and payment processing. Nonprofits can either use Givebutter for free, if their fundraising campaigns offer a place for users to donate to Givebutter, or organizations pay a 1% to 5% platform fee.

“From day one, we had customers,” Friedman said. “It was very clear that there was a lot of demand for great fundraising tools and not a great tool set for those change makers.”

The startup raised $50 million from Bessemer’s Venture Partner’s BVP Forge Fund with participation from Ardent Venture Partners this week. Friedman said the money will be used for marketing to help the startup scale as the company has grown to this size thus far largely with almost zero marketing spend.

What initially got me interested in this deal — beyond the fact that the company is profitable from a largely donation-based revenue system or the fact that it calls its employees “Butter Slices” — was that it was a sizable round in the nonprofit tech sector, which has been popping up significantly more as of late.

During the most recent YC Demo Day, two startups, Givefront and Aidy, were building tech for nonprofits. While these companies weren’t the first nonprofit-flavored startups to ever go through YC, they are some of the first to be building software for the nonprofits; many past YC companies in the space are nonprofits themselves, and Givefront and Aidy absolutely stood out in this year’s AI- and dev-tool-dominated cohort.

I asked Friedman if it felt like momentum in this category had changed since he got started eight years ago, and Friedman said it definitely has and that the timing is right for this category. There has been a lot of recent consolidation in the space, especially regarding private equity-backed nonprofit software players like Bloomerang and Bonterra, each of which has made a handful of acquisitions in the last few years alone. This leads to higher fees and many nonprofits looking for less-expensive solutions, Friedman said. Once people get interested in the sector, he said, they often realize how big the potential market is.

In 2022, Americans donated nearly $500 billion to charity, according to the National Philanthropic Trust, down 3.4% from 2021. There are more than 1.5 million nonprofits and growing, and building to even get a slice of that market could provide a huge windfall. Givebutter is a good example of this. The company works with more than 35,000 nonprofits and has processed more than $1 billion in donations, but it is still barely making a dent in the overall nonprofit industry.

“We have about 1% market share,” Friedman said. “That’s amazing. I’m really proud of that, but I’m also like there are 99% of nonprofits out there that can benefit, and a big part of why we raised was to go do that.”

Givebutter might just start to run into more competition on the way. “Nonprofits are incredibly resilient,” Friedman said. “There [have] been downturns and upturns in the economy for a number of years and nonprofits have grown. Nonprofits also solve some of the world’s largest problems. I’m happy to see more people being aware of that and investing in that.”


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Photo-sharing community EyeEm will license users photos to train AI if they don't delete them | TechCrunch

April 27, 2024 2:43 AM0


EyeEm, the Berlin-based photo-sharing community that exited last year to Spanish company Freepik, after going bankrupt, is now licensing its users’ photos to train AI models. Earlier this month, the company informed users via email that it was adding a new clause to its Terms & Conditions that would grant it the rights to upload users’ content to “train, develop, and improve software, algorithms, and machine-learning models.” Users were given 30 days to opt out by removing all their content from EyeEm’s platform. Otherwise, they were consenting to this use case for their work.

At the time of its 2023 acquisition, EyeEm’s photo library included 160 million images and nearly 150,000 users. The company said it would merge its community with Freepik’s over time.

Once thought of as a possible challenger to Instagram — or at least “Europe’s Instagram” — EyeEm had dwindled to a staff of three before selling to Freepik, TechCrunch’s Ingrid Lunden previously reported. Joaquin Cuenca Abela, CEO of Freepik, hinted at the company’s possible plans for EyeEm, saying it would explore how to bring more AI into the equation for creators on the platform.

As it turns out, that meant selling their work to train AI models.

Now, EyeEm’s updated Terms & Conditions reads as follows:

8.1 Grant of Rights – EyeEm Community

By uploading Content to EyeEm Community, you grant us regarding your Content the non-exclusive, worldwide, transferable and sublicensable right to reproduce, distribute, publicly display, transform, adapt, make derivative works of, communicate to the public and/or promote such Content.

This specifically includes the sublicensable and transferable right to use your Content for the training, development and improvement of software, algorithms and machine learning models. In case you do not agree to this, you should not add your Content to EyeEm Community.

The rights granted in this section 8.1 regarding your Content remains valid until complete deletion from EyeEm Community and partner platforms according to section 13. You can request the deletion of your Content at any time. The conditions for this can be found in section 13.

Section 13 details a complicated process for deletions that begins with first deleting photos directly — which would not impact content that had been previously shared to EyeEm Magazine or social media, the company notes. To delete content from the EyeEm Market (where photographers sold their photos) or other content platforms, users would have to submit a request to [email protected] and provide the Content ID numbers for those photos they wanted to delete and whether it should be removed from their account, as well, or the EyeEm market only.

Of note, the notice says that these deletions from EyeEm market and partner platforms could take up to 180 days. Yes, that’s right: requested deletions take up to 180 days but users only have 30 days to opt out. That means the only option is manually deleting photos one by one.

Worse still, the company adds that:

You hereby acknowledge and agree that your authorization for EyeEm to market and license your Content according to sections 8 and 10 will remain valid until the Content is deleted from EyeEm and all partner platforms within the time frame indicated above. All license agreements entered into before complete deletion and the rights of use granted thereby remain unaffected by the request for deletion or the deletion.

Section 8 is where licensing rights to train AI are detailed. In Section 10, EyeEm informs users they will forgo their right to any payouts for their work if they delete their account — something users may think to do to avoid having their data fed to AI models. Gotcha!

EyeEm’s move is an example of how AI models are being trained on the back of users’ content, sometimes without their explicit consent. Though EyeEm did offer an opt-out procedure of sorts, any photographer who missed the announcement would have lost the right to dictate how their photos were to be used going forward. Given that EyeEm’s status as a popular Instagram alternative had significantly declined over the years, many photographers may have forgotten they had ever used it in the first place. They certainly may have ignored the email, if it wasn’t already in a spam folder somewhere.

Those who did notice the changes were upset they were only given a 30-day notice and no options to bulk delete their contributions, making it more painful to opt out.

Requests for comment sent to EyeEm weren’t immediately confirmed, but given this countdown had a 30-day deadline, we’ve opted to publish before hearing back.

This sort of dishonest behavior is why users today are considering a move to the open social web. The federated platform, Pixelfed, which runs on the same ActivityPub protocol that powers Mastodon, is capitalizing on the EyeEm situation to attract users.

In a post on its official account, Pixelfed announced “We will never use your images to help train AI models. Privacy First, Pixels Forever.”

EyeEm, the photo marketplace, changes hands as Freepik picks it up out of bankruptcy




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Good news for Rubrik, bad news for TikTok and medium news for early-stage startups | TechCrunch

April 27, 2024 12:01 AM0


Rubrik’s strong IPO pricing and warm reception by the public markets after its listing add more weight to the perspective that the public markets are not as closed to tech startups as some thought. If Rubrik’s result isn’t enough to break the logjam, well, maybe there’s something else going on.

But there was a lot more that happened this week, which meant that the Equity crew had a pile of news to get through as always, with a little bit of our own mixed in. Happily it was all pretty darn interesting, so Mary Ann and Alex started with Rubrik before pivoting to Pomelo, a startup that has a very interesting twist on the remittances market.

From there it was time to talk about TikTok. What was once an unfathomable result — TikTok being forced to divest from its parent company or face a ban — became reality pretty darn quickly. The United States is not the first company to ban the service, but we noted during the show that the company we are keeping is not the most enticing. Still, here we are; what does it mean for consumers?

And to close, Early Stage. TechCrunch held its annual early-stage focused event this year, and it was a banger. Not to toot our own horn, but it was the second year in a row that our shindig in Boston was packed, useful and lots of fun. The coffee was even good. At a tech conference. Alex had notes.

Equity is back on Monday, thanks for hanging out with us!

Equity is TechCrunch’s flagship podcast and posts every Monday, Wednesday and Friday, and you can subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

You also can follow Equity on X and Threads, at @EquityPod.

For the full interview transcript, for those who prefer reading over listening, read on, or check out our full archive of episodes over at Simplecast.




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The FTC's ban on noncompete clauses could be good for startups. But it also might be struck down. | TechCrunch

April 26, 2024 6:57 AM0


The Federal Trade Commission voted 3-2 to ban the use of most noncompete agreements on Tuesday. This ruling means companies can’t require their employees, that aren’t senior executives, to wait a set amount of time before joining a competitor or launching their own company in the same category. While the FTC’s ruling will impact industries like financial services and hedge funds the most, due to the prevalence of such agreements in those industries, it could also impact startups.

The ban could actually be positive news for startup founders and hiring managers in a number of ways. For one, it could open up the hiring pool, says Nick Cromydas, the co-founder and CEO of hiring and recruiting startup Hunt Club.

“Now there will be more potential crosspollination of companies that really understand businesses models and spaces,” Cromydas said. “I expect you will see more hiring with direct domain experience than you’ve seen in a while.”

Ryan Vann, a partner focused on employment law at Cooley, agreed. He said that he’s had clients that were too anxious to hire potentially game-changing talent away from larger companies for fear those companies would act on the noncompete agreement.

Banning noncompete agreements could also encourage startups to foster a strong company culture that makes people want to stay, as opposed to using threats to keep them, Cromydas said.

Some members of the startup community seem happy about the ruling as well — rare these days when it comes to decisions by the FTC. Sarah Guo, the founder at AI-focused VC firm Conviction, tweeted that banning noncompete agreements is a win for innovation. Cole Harrington, the co-founder and CEO at ThoughtWave AI agreed with her.

Understandably, some startup CEOs are worried about how the end of noncompetes could impact the security of intellectual property, but Cromydas said there are other ways for companies to protect themselves. Startups can have employees sign non-disclosure agreements regarding intellectual property, or spend more time filing patents. Instead of blocking an employee’s future employment, such alternatives prevent them from using the previous employer’s intellectual property knowledge at their new jobs.

Startup employees might not see much of a change for two other reasons: noncompete agreements were already very hard to enforce, Vann said, and they were trending out of vogue among startups anyway. Certain states, including startup-heavy California, have existing state laws that restrict them. Although, he added that any client of his that can use them, typically does despite the low-rate of them actually coming into play.

“Even without this ban, it is really, really hard in virtually every court in America to enforce a noncompete unless you have something added that are bad facts like theft of confidential information, soliciting customers before you go, trying to set up competing business before you go,” Vann said. “I would almost never go into litigation unless I was armed with that kind of evidence or misappropriation of trade secrets.”

Given all that, noncompetes are becoming less common, according to company data from Hunt Club. While five years ago 90% of offers that came through Hunt Club’s platform included a noncompete agreement, that figure now is about 40%. Although, Cromydas said he wouldn’t doubt it they were rising again in hot sectors like AI where intellectual property is crucial and the war for talent is high.

So what should startup CEOs do if they currently use noncompete agreements with their employees? Absolutely nothing, according to Vann who questions whether the ban will actually stick. Multiple lawsuits against the ruling have already been filed including one from the U.S. Chamber of Commerce and another from tax service firm Ryan LLC.

Vann thinks this potential ban could be struck down by numerous courts. If it does clear these legal hurdles, startups wanting to hire someone that may have signed one can terminate existing noncompete agreements incredibly easily.

“The worse case scenario if you are a startup, and hire someone with a noncompete, is all you have to do is issue the notice to say that your noncompete is not enforceable,” Vann said. “I would keep it at status quo right now and monitor what’s happening.”




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Rubrik's shares climb 20% in its public debut | TechCrunch

April 25, 2024 11:28 PM0


Rubrik shares hit the New York Stock Exchange Thursday debuting at $38 a share. The cybersecurity company priced it shares at $32 apiece Wednesday night, just a hair over its initial target range of $29 to $31 after raising $752 million. This share price gives Rubrik a fully diluted valuation of $6.6 billion, up 88% from its last primary valuation of $3.5 billion in 2019.

Rubrik sells cloud-based security software to enterprise customers and has 1,700 customers with contracts worth more than $100,000 and 100 customers who pay the company more than $1 million a year. The Silicon Valley startup was founded in 2014 and has raised more than $550 million in venture capital, according to Crunchbase data.

The VCs hoping the most that Rubrik’s stock keeps climbing are Lightspeed and Greylock. Lightspeed backed the company in five separate rounds, including leading the company’s Series A round back in 2015. Lightspeed, and those affiliated with it, own 23.9% of Rubrik’s shares prior to the IPO, according the company’s S-1 filing. The firms’ conviction in the company might come from the fact that Rubrik co-founder and CEO, Bipul Sinha, was formerly a partner at Lightspeed from 2010 to 2014. Sinha owns 7.6% of shares.

Greylock holds 12.2% of Rubrik’s shares. The venture firm led the startup’s $41 million Series B round in 2016 and participated in the Series C and Series D rounds as well. Greylock partner Asheem Chandna has sat on the company’s board since 2015.

In addition to Sinha, Rubrik’s other two co-founders hold notable stakes. Arvind Jain, a co-founder who is now the CEO of AI work assistant startup Glean, holds a 7% stake. Arvind Nithrakashyap, co-founder and current Rubrik CTO, holds 6.7%.

Other big-name VCs backed the company, too. Khosla Ventures led Rubrik’s Series C round in 2016; IVP led the company’s Series D round in 2017; and Bain Capital Ventures led the company’s Series E round in 2019. It’s unclear what percentage of shares these firms still own, but it’s under 5%, as none of these investors were named in the company’s S-1. NBA All-Star Kevin Durant’s Thirty Five Ventures was also an investor.

The results of Rubrik’s IPO are under more scrutiny than some of the other recent public listings, because Rubrik’s debut looks more like a 2021 IPO and less like the other 2024 IPOs. Ibotta debuted as a profitable company. Astera Labs and Reddit both had recently swung to a GAAP net profit. Rubrik, however, is as an unprofitable business seeing its losses continue to grow, not shrink.

The company reported that its revenue grew a little under 5% from its fiscal 2023 year to its fiscal 2024 year, growing from $599.8 million to $627.9 million. At the same time, the company’s losses continued to grow: Its net losses grew from 46% in its fiscal 2023 to 56% in its fiscal 2024 year.

The company’s metrics do have a bright spot, however: subscription revenue. In the company’s most recent fiscal quarter, subscriptions made up 91% of the revenue, up from 73% a year prior. Subscription revenue tends to be sticky, and growth there could explain why some investors are more confident about the future prospects of Rubrik despite its current losses and lack of profitability.

Rubrik is the fourth venture-backed company to go public in recent months as investors seem eager to reopen the IPO market. All three companies that went before Rubrik — Ibotta, Reddit and Astera Labs — popped on the first day of trading and have all since settled, some in better positions than others. But none has been a disaster or negative omen for other potential IPOs this year.

While four positive IPO debuts could spark more companies to come off of the sidelines, the current guidance that interest rate cuts may not come as early in 2024 as many had predicted may put a damper on the the IPO market’s recent momentum.


Software Development in Sri Lanka

Robotic Automations

RevenueCat raises $12M Series C as it expands its subscription management to the web | TechCrunch

April 25, 2024 8:41 PM0


RevenueCat, a top subscription management platform for apps that monetize via in-app purchases, is now flush with new capital as it expands to the web. The company has closed on a $12 million Series C led by Adjacent, following the launch of a new product, RevenueCat Billing, that allows web app developers to integrate subscription purchases into any website. Later, it will also support Roku.

The timing of the product’s launch is notable, as it arrives amid the implementation of the E.U.’s Digital Markets Act (DMA) regulation, which is forcing Apple to open up the iPhone and the App Store to new completion. As a result, Apple initially blocked iPhone web apps (Progressive Web Apps, or PWAs) in the E.U., likely fearing developers would abandon its App Store, before reversing that decision under regulatory pressure.

For RevenueCat, however, the changes ahead for iOS — not to mention Apple’s refusal to cut its default 15%-30% commission rate — mean there are now more developers who are looking to the web to monetize their apps.

“It could be for progressive web apps or any kind of customer that wants to take payments outside of the App Store,” explains RevenueCat CEO Jacob Eiting, of the new web billing product. “It’s going to play within all the new [DMA] rules…it’s going to be a pretty significant product expansion for us,” he said.

The company says it moved in this direction because of the inbound interest from developers. Even if they didn’t have a web app, many developers wanted to shift their customers to the web to pay.

Though Stripe already enables this functionality, what developers were lacking was a system that’s specifically designed for consumer subscription apps. Now, even if developers are processing payments through Stripe or others, they’re getting their data and insights in the same format and within the same dashboard where they already manage their in-app purchase data. This makes it easier for them to focus on how their subscription apps are monetizing, overall, regardless of where the payment comes from — web or mobile.

Though Apple has historically not allowed app developers to steer customers to the web from inside their iOS apps, it has permitted steering from other channels — like the developer’s website or emails to customers. The E.U.’s DMA rules should also permit developers to steer customers to the web from inside their mobile apps, too.

With RevenueCat Billing, essentially a web SDK, developers can accept subscription payments from any website. It joins other recent product releases like Paywall, Targeting, and Experiments, which are all designed to help developers grow their revenue. Today, RevenueCat powers subscriptions in over 30,000 apps and handles over $2 billion in subscriptions annually, it says.

The new Series C from Adjacent (led by Nico Wittenborn — a Series A investor, now board member) totals $12 million. Other investors include Y Combinator, Index Ventures, Volo Ventures, and SaaStr Fund. Ahead of this round, RevenueCat had raised $56 million, bringing its total raise to $68+ million.

In addition to fueling its new products, the fundraise will help RevenueCat expand to new markets, including Japan and South Korea.

“Our main competitor is ‘cobbling together monetization technology yourself’,” said RevenueCat CTO and co-founder Miguel Carranza, in a statement about the fundraise and expansions. “In the U.S., we’ve done a good job at educating developers, product people, marketers, and CEOs on the challenges of building in-house. In many other regions, it’s unfortunately still the default for businesses to sink valuable resources into something that provides zero differentiation or value for that business’s end users. We’re investing in those regions by expanding our support for languages and local currencies later this year, deepening our relationships with local technology partners and agencies, as well as hiring in-market where possible,” he added.

Image Credits: RevenueCat

RevenueCat is not yet a profitable company, but Eiting says that profitability is always on the horizon. The company still has the money it raised in 2021 and now has over $40 million in the bank in addition to around $20 million in ARR. It has also halved its burn rate since last summer.

“There’s so much stuff we can build by deploying capital and doing it on a profitable basis would just slow us down right now. So while there’s access to capital, which isn’t always the case…the best thing for our customers and investors is to take more capital and deploy it faster,” he told TechCrunch.

“RevenueCat is too important to too many apps to risk the company driving towards a financial cliff. This may be counter to the prevailing narrative of how venture-backed companies should be built, but our investors are aligned with us and know that Miguel and I are leading the company to maximize the value for developers. Investors make more money when developers make more money,” the CEO added in a blog post. “To that end, we’re still aiming to take the company public in this decade,” he said.




Software Development in Sri Lanka

Robotic Automations

Petlibro’s new smart refrigerated wet food feeder is what your cat deserves | TechCrunch

April 25, 2024 6:37 PM0


Ding, ding, ding! Dinner is served. Fresh out of the cold tin can.

Petlibro, a pet tech startup that designs automatic food and water dispensers for cats, launched its first refrigerated smart feeder on Thursday. The company’s new “Polar Wet Food Feeder” aims to solve a widely known problem among pet owners: how to keep their cat’s wet food fresh while they’re away.

While dry cat food can stay out for longer, scientists have theorized that cats favor wet food because it’s similar to their natural diets. Also, some pet parents stray from dry kibble due to the high carbohydrates. Leaving wet food out while out of town, however, can lead to bacterial growth and spoilage. Owners can now ditch the ice packs and be assured that their pampered cats are being given fresh food that won’t make them sick.

“The value of incorporating wet food into a cat’s diet cannot be underestimated, especially when it comes to weight management, digestion, urinary tract health, and more,” Christie Long, chief medical officer at Modern Animal, said in a statement. “What Petlibro has developed in Polar makes a world of difference for cats and pet parents alike.”

Image Credits: Petlibro

Polar has three compartments and can hold up to 22.2 ounces of food (7.4 oz per portion), allowing owners to be away for up to 72 hours without the need for a pet sitter. Using semiconductor cool technology, the device keeps the food nice and cool (30-50°F). Additionally, the bowl trays are BPA-free plastic and dishwasher safe.

The accompanying mobile app allows owners to control the WiFi-enabled smart feeder via iOS and Android devices. They can customize their pet’s feeding schedule and be notified when the cat starts eating, thanks to motion detection technology. It should also be noted that if a user’s WiFi ever goes out while they’re out of town, the app will notify them that the device is offline. If there’s a power outage, Polar will keep the food cold for 12 hours.

During a week of testing, we found that the app was reliable and never missed a feeding time. Thankfully, the device isn’t too loud, only emitting a low humming noise that can be easily ignored while sleeping at night. One drawback is the three compartments, which could be a problem for owners who feed their pets more than twice per day. Similar products we found on Indiegogo—Catsomat and Happy Llama Tech—have double the number of compartments.

Polar costs $129.99 and is available for purchase on petlibro.com and Amazon.

Image Credits:

The first time-controlled feeding device for pets dates back to the 1940s. Meanwhile, an automatic feeder for horses was invented in 1997. Decades later, it’s about time modern tech companies came up with advanced refrigerated devices for cats.

With a large portion of cat owners buying wet food, Petlibro’s new product addresses a growing market. The wet pet food industry reached approximately $35 billion in 2023 (Cat food makes up 61% of the total market.) According to Petlibro’s own data, customers highly requested an automated refrigerated feeder. Out of over 900 survey participants, 56% of cat parents said the biggest downside of using wet food is maintaining freshness.

“When we look into the pet tech industry, there’s not much innovation happening,” Petlibro founder and CEO York Wu told TechCrunch. “We spent a couple of years refining the concept [of Polar], developing the product with tests to make sure it was safe… I think this is a game changer for the way people are feeding their pets.”

Since selling its first product in late 2022, Petlibro has sold over three million devices. The company sold more than one million units in 2023 alone.


Software Development in Sri Lanka

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