Архив рубрики: Startups

Local news app News Break raises $115M

The popular news app News Break is announcing that it has raised $115 million in new funding.
The press release claims this round makes News Break “one of the first new unicorns of 2021,” but the startup declined to disclose its actual valuation.
Founder and CEO Jeff Zheng said that when he started the company in 2015, the goal was to differentiate itself from other news aggregation apps by focusing on local news, and to “help or empower these local content creators.”

To be clear, you can find similar stories in News Break that you’d see in other news apps (there’s a whole section for coronavirus news, for example, and this morning you’ll see plenty of headlines about yesterday’s violent takeover of the U.S. Capitol), but you’ll also see plenty of stories that are highlighted specifically based on your location.

Facebook and Instagram block #StormTheCapitol, lock Trump out of posting for 24 hours

“Technology is interweaving with every aspect of the company — in how we empower local publishers and local journalists to generate content more effectively and to reach an online audience more effectively,” Zheng said. “We have AI tools to help provide all these relevant articles … We have location profiles and what you’re most interested in, which we basically match against the content.”

Jeff Zheng. Image Credits: News Break

The local focus may be increasingly valuable given the broader economic challenges facing the local news business — as Zheng put it, there’s “strong user demand” for local news but “weak supply.” And the strategy seems to have paid off for News Break so far, with the app reaching the top spot in the News category of Apple’s U.S. App Store multiple times (it’s currently ranked No. 4), and in Google Play as well. The startup says it’s currently reaching 12 million daily active users.
Zheng said that while News Break already shares ad revenue with publishers, he’s hopeful that the value it provides those publishers will only grow over time: “We want to give as much money back to the creators as possible.”
When I suggested that publishers and journalists may be leery about relying too much on a third-party platform to reach their audience, Zheng argued that News Break’s incentives are very different from the big internet and social media platforms.
“We are local-centric,” he said. “If local publishers are struggling, if the newspapers are diminishing every year, then sooner or later we are out of business.”
And while Zheng previously led Yahoo Labs in Beijing and was also founding CEO at Chinese news startup Yidian Zixun — plus, the startup has team members in Beijing and Shanghai — he emphasized that this is a “U.S. high-tech company incorporated in Delaware, headquartered in Mountain View,” with the majority of its workforce in the United States and a focus on the U.S. market. The distinction could become important if News Break continues to grow, given the U.S. government’s current attempts to ban some Chinese companies.

TikTok’s epic rise and stumble

News Break previously raised $36 million in funding. The new round was led by Francisco Partners, which is taking a seat on the News Break board. IDG Capital also participated.
In a statement, Francisco Partners Principal Alan Ni said:
News Break’s breakout multi-year successes in the local news space is what first brought them to our attention. We are inspired by their mission and extremely impressed by the work they have done to bring local-news distribution into the 21st Century through cutting-edge machine learning and media savvy. We are thrilled to be partnering with News Break’s talented leadership team as they continue to drive local news innovations while also rapidly expanding their business into adjacent local verticals beyond news.

Flipboard expands into local news

Local news app News Break raises $115M

Gawq wants to burst your ‘echo chamber’ with its smarter news app

A new startup called Gawq wants to tackle the problem of fake news and the “echo chamber” problem created by social media, where our view of the world is shaped by manipulative algorithms and personalized feeds. Through Gawq’s newly launched mobile news app, it aims to present news from a range of sources, while allowing users to filter between news, opinion, paid content and more, as well as compare sources, check facts and even review the publication’s content for accuracy.
The idea for Gawq comes from Joshua Dziabiak, co-founder and now board member at the now profitable insurance tech startup The Zebra. Dziabiak stepped down from his day-to-day role this March, and founded Gawq shortly after.
“It started as a passion project and then it transformed into a business,” Dziabiak explains. “I wanted to do something that had a larger social impact. And this idea — this problem — has surfaced and been magnified in really big ways over the past year, especially,” he says.

When news is served up through social media channels, people are presented with their own version of reality, as the algorithms begin to filter out the news that doesn’t engage them and show them more of what does. Over time, this system led some publishers to pursue clicks and outrage with over-the-top, sensational headlines, but it also spawned a network of publications that would slant and bias the news in ways that better connected them with an either right or left-leaning audience.

The Zebra reaches $100M run rate, turns profitable as insurtech booms

As a result, the media environment overall began to center itself around eyeballs and not necessarily news quality, Dziabiak says. While there is still quality journalism being created, it can sometimes be hard to find among all the noise.
“I believe journalists and content creators need a new measure for success. One that is based on the core ethics of journalism, and not the number of clicks or shares,” Dziabiak notes.

Image Credits: Gawq

The Gawq name is meant to be a reminder of how today’s headlines often scream for our attention. But it misses the mark for an app about news accuracy. At its core, Gawq is a news aggregator where you are not meant to “gawk” at headlines, but actually read and consider the news with a more critical eye.
At launch, the app organizes more than 150 different top media sources of all types and sizes, including those that lean one way or the other. The publishers cover topics like U.S. and world news, politics, sports, business, tech, entertainment, science, lifestyle news and more.
Gawq also organizes the day’s news without using any sort of algorithms or personalization engines, but instead by topic. As you read, you click to compare coverage of the story with other sources to get a better idea of how different outlets are writing about the same topic. With a clever red and blue slider bar at the top of the screen, you can drag your finger over to the red side to see the coverage from right-leaning sources, or you can drag it to the blue side to see the more left-leaning coverage.
The company says it uses data from three different nonprofits that audit media — AllSides, Media Bias Fact Check and Ad Fontes Media — to determine if sources are “right” or “left.”

Image Credits: Gawq

Just below the slider bar are the related fact checks to the topic at hand, for easy reference.
While Gawq will allow users to toggle some news sources on or off within the app’s settings, it uses language that deters you from doing so by reminding you that it works best when you maintain a “diverse set of media.”
In addition, Gawq introduces a “smart labels” feature to automatically identify and tag non-news — like op-ed’s, sponsored content or even celeb gossip, if you hate that sort of thing. You can toggle these on or off, too, if you want to hide anything that’s not hard news.
Another nice feature — for the news consumer at least, if not the publisher — is that Gawq loads articles by default into a “reader mode” that strips the ads and distractions that tend to fill the pages on news websites these days. You can still click to view the article on the website, if you prefer.
While much of the above is related to how the news is presented to the reader, Gawq’s bigger bet is that it can create a Wikipedia-like community of news reviewers who will rate stories for adherence to journalistic practices. This is a more ambitious and perhaps overly optimistic endeavor.
On every article, users can click a review button that walks them through a short quiz where they’re asked to rate the story’s balance, the details provided and whether the headline was clickbait. Users then add a comment and submit their report. This review process was built off the core ethics of journalism as defined by the Society of Professional Journalists, Dziabiak says.

Image Credits: Gawq

Likely, only a minority of Gawq users would rate the stories. But over time and with scale, the reviews could help give outlets an accurate rating on news accuracy and their tendencies toward sensationalism, in the eyes of news consumers. That data may have external value, but for now, Gawq’s business model is “TBD,” Dziabiak admits.
The problem Gawq aims to tackle is a difficult one. And arguably, those who need to widen their worldview will be least likely to download a new app to do so. They’re often passive news consumers who have sat back ingesting news (and often, outrage and lies) from ever-personalized social media feeds. They then click on one favorite news TV channel for everything else. But there is a growing number of people who want a more neutral media landscape, and Gawq can help them find it with how it positions news as right, left or centered when comparing sources.
The startup is currently self-funded and has a small team of engineers, mostly working on a contract basis. Gawq has not ruled out future investment, however.
The app is a free download on iOS and Android.
 

Gawq wants to burst your ‘echo chamber’ with its smarter news app

MTG acquires mobile racing game studio Hutch Games for up to $375 million

Sweden’s MTG is making a significant acquisition in the mobile gaming industry. The company is acquiring Hutch Games, the London-based game studio behind popular mobile racing games such as Rebel Racing, F1 Manager and Top Drives.
The acquisition is an important one for MTG as the company is spending $275 million right away and setting aside another $100 million for performance-based payments.
If you’re not familiar with MTG, you probably know its portfolio companies. Over the past few years, MTG has acquired ESL and DreamHack to become an esports leader.

MTG has also acquired InnoGames and Kongregate for their popular web-based and mobile games. And it sounds like MTG isn’t done just yet, as the company plans to acquire more companies in the near future.
MTG explains why the acquisition makes sense in its announcement. Hutch Games isn’t focused on a single game. It has built a portfolio of successful games, which is always a good sign for future growth.
The game studio has also licensed some well-known brands, such as F1. And MTG believes that F1 Manager, Top Drives and Rebel Racing still have a lot of growth potential. Free-to-play mobile games have become games-as-a-service, so you want to keep them popular over the long run.
When it comes to long-term potential, Hutch Games also has more games in the pipeline for 2021 and 2022. Finally, it’s a cost-effective studio, as most employees are developers.
During the first nine months of 2020, Hutch Games generated $56.3 million in revenue and $13.3 million in earnings before interest and taxes (EBIT). Hutch Games investors included Backed VC, Index Ventures, Initial Capital and angel investor Chris Lee.
As you can see, free-to-play games can be lucrative. That’s why there will be some consolidation in the future. Some companies will use their deep pockets or take advantage of debt to build out big portfolios and the real estate of your home screen, one game at a time.

MTG acquires mobile racing game studio Hutch Games for up to $375 million

How Ryan Reynolds and Mint Mobile worked without becoming the joke

In the past decade, celebrity interest and investment in tech companies has significantly increased. But not all celebrity investments are created equally. Some investors, like Ashton Kutcher, have prioritized the VC pursuits. Some have invested casually without getting overly involved. Others have used their considerable platforms to market their portfolio to varying degrees of success.
It’s been a little over a year since Ryan Reynolds bought a majority stake in Mint Mobile, a deal that has already had a dramatic impact on the the MVNO (mobile virtual network operator).
The four-year-old company has seen a tremendous amount of growth, boosting revenue nearly 50,000% in the past three years. However, the D2C wireless carrier has seen its highest traffic days on the backs of Reynolds’ marketing initiatives and announcements.

There is a long history of celebrities getting involved with brands, either as brand ambassadors or ‘Creative Directors’ without much value other than the initial press wave.
Lenovo famously hired Ashton Kutcher as a product engineer to help develop the Yoga 2 tablet, on which I assume you are all reading this post. Alicia Keys was brought on as BlackBerry’s Global Creative Director, which felt even more convoluted a partnership than Lady Gaga’s stint as Polaroid’s Creative Director. That’s not to say that these publicity stunts necessarily hurt the brands or the products (most of the time), but they probably didn’t help much, and likely cost a fortune.
And then there are the actual financial investments, in areas where celebrities fundamentally understand the industry, that still didn’t get to ‘alpha.’
Even Jay-Z has struggled to make a music streaming service successful. Justin Bieber never really got a selfie app off the ground. Heck, not even Justin Timberlake could breathe life back into MySpace. Reynolds seemingly has an even heavier lift here. It’s hard to imagine a string of words in the English language less sexy than, “mobile virtual network operator.”
Reynolds tells TechCrunch that he viewed celebrity investments as a kind of “handicapping,” prior to the Mint acquisition.
“I’ve just sort of seen how most celebrities are doing very, very well,” he explains. “We’re generally hocking or getting behind or investing in luxury and aspirational items and projects. Then George and I had a conversation about a year-and-a-half ago, maybe longer, about what if we swerved the other way? What if he kind of got into something that was hyper practical and just forget about the sexy aspirational stuff.”
Mint isn’t Reynolds’ first entrepreneurial venture. He bought a majority stake in Portland-based Aviation Gin in 2018, which recently sold for $610 million. He also cofounded marketing agency Maximum Effort alongside George Dewey, which has made its own impact over the past several years.

In wake of Sprint/T-Mobile deal, Ryan Reynolds has an announcement

Maximum Effort was founded to help promote the actor’s first Deadpool film. Reynolds and Dewey had come up with several low-budget spots to get people excited about an R-rated comic book movie. The bid appears to have worked. The film raked in $783.1 million at the box office — a record for an R-rated film that held until the 2019 release of Joker.
Maximum Effort (and Reynolds) was also behind the viral Aviation Gin spot, which poked fun at the manipulative Peloton ad that aired last year around the holidays. The same actress who portrayed a woman seemingly tortured by her holiday gift of a Peloton sits at a bar with her friends, shell-shocked, sipping a Martini.

The original ad on YouTube, not counting recirculation by the media, has more than 7 million hits. Reynolds calls it ‘fast-vertising’.
“We get to react,” he told TechCrunch. “We get to acknowledge and play with the cultural landscape in real time and react to it in real time. There isn’t any red tape to come through, because it’s just a matter of signing off on the approval. So in a way, it’s unfair, in that sense, because most big corporations, they take weeks and weeks or months to get something approved. Our budgets are down and dirty, fast and cheap.”
He explained that this type of real-time marketing is only possible because he’s the owner of Maximum Effort (and in some cases of the client businesses, as well), but because there is no red tape to cut through when a great idea presents itself.
Reynolds has brought this marketing acumen to Mint Mobile in a big way. Last year during the Super Bowl, Reynolds took out a full page ad in The New York Times, explaining that the decision to spend $125,000 on a print ad instead of $5 million+ on a Super Bowl commercial would enable the prepaid carrier to pass the savings on to consumers.
In October, Reynolds spun Mint’s 5G launch into another light-hearted spot. He brought on the head of mobile technology to explain what 5G actually is, and after hearing the technical explanation, happily said “We may never know, so we’ll just give it away for free.”

Mint also released a holiday ad just a couple of weeks ago warning of wireless promo season, wherein large wireless carriers may try to lure customers into expensive contracts using new devices. Standing over a bear trap, Reynolds dryly states: “At Mint Mobile, we don’t hate you.”
Reynolds enjoys nearly 17 million Twitter followers and more than 36 million Instagram followers. He uses both platforms to promote his various brands without alienating his followers. Moreover, he doesn’t exclusively promote his brands on social media, but weaves in his own funny personal commentary or gives followers a peek into his marriage with Blake Lively, which we can all agree is #relationshipgoals.
Mint Mobile partners exclusively with T-Mobile to provide service, and unlike some other MVNOs, it uses a direct-to-consumer model, foregoing any physical footprint. Plans start at $15/month and top out at $30/month. CMO Aron North says that Reynolds’ ownership and involvement with Mint Mobile is “absolutely critical.”
“Ryan is an A plus plus celebrity, and he’s very funny and entertaining and engaging,” said North. “His reach has given us a much bigger platform to speak on. I would say he is absolutely critical in our success and our growth.”

We asked Reynolds if he has any specific plans for further tech investment, or if there are any trends he’s keeping an eye on. He explained that his motivations are not purely capitalistic.
“I’m really focused on community and bringing people together,” said Reynolds. “We think it’s super cool to bring people together, particularly in a world that is very divisive. Even in our marketing, we try to find ways to have huge cultural moments without polarizing people without dividing people without saying one thing is wrong.”
In one of the company’s more notable recent spots, Reynolds enlisted the help of iconic comedian, Rick Moranis. It was an impressive coup, given the actor’s seeming retreat from the public eye, turning down two separate Ghostbusters film reboots.
“It’s funny what happens when you just ask,” says Reynolds. “I explained that people genuinely miss him and his performances and his energy. And he, for whatever reason, said yes, and the next thing I know, six days later, we were out of there in 15, 20 minutes and we shot our spot.”
Of course, it didn’t escape the internet’s notice that two well-known Canadian actors were standing in a field, selling a U.S.-only wireless service.
“I would love to see [Mint] in Canada,” Reynolds says. “There’s a Big Three here that’s challenging to crack. I don’t pretend to know the telecom business well enough to say why, how or what the path forward would be there. I see basically a tsunami of feedback from Canada, asking ‘why can’t we have this here?’ I think it’s sexy. It’s pragmatic and sexy. That’s why I got involved with it.”

How Ryan Reynolds and Mint Mobile worked without becoming the joke

Lime touts a 2020 turnaround and 2021 profitability

Micromobility company Lime says it has moved beyond the financial hardship caused by the COVID-19 pandemic, reaching a milestone that seemed unthinkable earlier this year.
In short, the company is now largely profitable.
Lime said it was both operating cash flow positive and free cash flow positive in the third quarter — a first — and is on pace to be full-year profitable, excluding certain costs (EBIT), in 2021.

During the WSJ Future of Everything event Thursday, Lime CEO Wayne Ting painted a far rosier picture of the company’s future than one might have expected.
There was a time when Bird and Lime, competing domestic scooter rental companies, were raising capital at a torrid pace, fighting for market share, regulatory breathing room and sidewalk real estate. Then, the pandemic hit and the companies had to take shelter.
Lime underwent a round of layoffs in April, taking on capital from Uber the next month in a down-round that brought its valuation under the $1 billion mark. As it announced in a blog post that TechCrunch reviewed before publication, it paused most of its operations for a month during the early COVID-19 days.
“It was certainly a very, very tough decision for us earlier this year and I know we weren’t the only company during COVID,” Ting said during the event. “I think it’s been in so many ways helpful to us to realize how hard these choices can be. We’re going to be growing headcount again. We’re going to do so in a careful way so that we’re not going have to make hard choices like the ones we made earlier this year.”
Now things are better, Lime says. Much better. Indeed, the company claims that it is the “first new mobility company to reach cash-flow positive for a full quarter.”
Cash flow positivity, in general, is an important threshold for a startup to reach as it implies that the company can largely self-fund from that point forward, limiting its dependency on external cash for survival.
Lime also claims that it “reached EBIT positive at the company level over the summer.” The specifics of the phrase “EBIT positive” are important. Was the company employing strict EBIT on its math and not discounting share-based compensation, or was it measuring using adjusted EBIT as many startups do, removing the cost of share-based compensation that shows up in GAAP results? According to the company the number did exclude share-based compensation, making the news slightly smaller.
Perhaps the most bullish data point from Lime is that it expects to be full-year profitable in 2021. TechCrunch asked for specifics because again how one measures profitability matters. It turns out, Lime is basing this projection on EBIT, as opposed to more traditional net income. For a startup this is not a surprising decision, but before we declare Lime fully “profitable,” we’ll want some more GAAP metrics.
Still, it appears that Lime is not going to die, and is, importantly, putting capital into developing new products. The company provided the first example of that new product pipeline on Thursday with the launch of the Gen4 scooter in Paris. It also teased a so-called “third and fourth mode” in the first quarter of 2021 as well as the addition of a swappable battery.
The scooter company wouldn’t give TechCrunch much information about what these third and fourth modes will be. The first two modes are bikes and scooters, which leaves skateboards, cars, flying cars and boats?
Lime did give TechCrunch a little bit of clarification, stating that “move beyond,” means the company will be operating an additional mode, accessed through the Lime app, in line with its goal to serve any trips under five miles. These modes will build on the Lime Platform play, but this will be operated by Lime rather than a partner.

Jump bikes are now on the Lime app and heading to more cities

Lime has long discussed reaching profitability. Perhaps because it and its competitor Bird were infamous for their losses during their early unicorn period.
By November of 2019, Lime was talking about reaching EBIT positivity in 2020. But the start of 2020 was not kind on the company, with 100 of its staff losing their jobs and 12 markets getting dropped. At the time TechCrunch wrote that “Lime is hoping to achieve profitability this year by laying off about 14% of its workforce and ceasing operations in 12 markets,” with the company itself writing at the time that “financial independence [was its] goal for 2020, and [that it was] confident that Lime will be the first next-generation mobility company to reach profitability.”
Depending on how you measure profitability, that could be true.
Things didn’t get easier for Lime later in the year. Its competitor Bird underwent layoffs, and Lime cut more staff in April. At the time, Lime said that it was focused on coming “back stronger than ever when this is over.”
The company is certainly in better shape than it was in April and May. So, how did Lime come back from the brink? In its own estimation, the company took time during its pause to “drill down on getting the business right, narrowing [its] focus and strengthening [its] fundamentals.” That might sound like corporate babble, but by taking a nearly full stop in its operating business, Lime could probably see a bit more clearly what was working and what was not. And with some cuts to what wasn’t, it could set up a future in which its operations were leaner, and more unit-economically positive.
And, now, here we are asking niggling questions about just what sort of profit Lime is really making. Instead of, you know, who might buy its leftover office furniture. It’s a nice turnaround.

Lime touts a 2020 turnaround and 2021 profitability