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Friday, 31 December 2021

Cheugiest tech moments of 2021

Technology has come a long way in 2021. There’s widespread mRNA vaccines! An asteroid-deflecting space mission! A very powerful laptop with a very controversial notch! But it’s unfortunately easier to think about the cringiest moments of the year than it is to remember times when we marveled at indoor farming robots. 

So hop aboard the choo-choo-cheugy train. We promise, this isn’t just a list of things Elon Musk tweeted in 2021.

Facebook is so Meta

Facebook changes its corporate branding to Meta

The biggest and most eye-wateringly silly rebrand of the year is uncontested: Facebook, one of the most recognizable names in the world, changed its name to Meta in order to distract from unflaggingly awful decisions and the irreparable harm it has caused countless people focus on the “metaverse,” something no one asked for and certainly no one wanted Facebook of all companies to take the lead on.

Block this out

Square is changing its name to Block

Meta’s not the only rebrand that went teeth-grindingly meta this year. Readers, we present… Block, FKA Square, originally a small business champion known for square-shaped card swiping dongles (quant!). Now, it’s taking a bite out of blockchain for its new name and identity, although apparently Block is not just about that. The company says it’s also a reference to block parties, building code, obstacles to overcome, “and of course, tungsten cubes.” (click for more cringe) Well, not so fast, Jack! H&R Block is already suing Block for trademark infringement, with the name, a block in its logo, and a green color scheme that all come a little too close to home, since H&R Block, best known for tax filing prep, also happens to sell accounting services to SMBs, mobile banking to consumers and other fintech services just like Square’s… I mean, Block’s. Hard to guess which blockhead will back down first/move to settle here.

Saturday Night Musk

Elon Musk, founder of SpaceX and chief executive officer of Tesla Inc., arrives at the Axel Springer Award ceremony in Berlin, Germany, on Tuesday, Dec. 1, 2020. Tesla Inc. will be added to the S&P 500 Index in one shot on Dec. 21, a move that will ripple through the entire market as money managers adjust their portfolios to make room for shares of the $538 billion company. Photographer: Liesa Johannssen-Koppitz/Bloomberg via Getty Images

Image Credits: Bloomberg (opens in a new window) / Getty Images

Mr. Musk perhaps said it best when he played a doctor in the Gen Z Hospital skit: “You all might want to sit down, what I have to say might be a little cringe.” Elon may have hoodwinked a substantial part of the population of global fanboys hoping to get rich on his coattails, but at the end of the day this couldn’t hold any water on Saturday Night Live. He’s not an actor, and he’s not that funny, so even with the wattage of being one of the world’s richest men and a major celeb on social media, his SNL hosting was… a smug, wooden, boring, awkward dud. You’re left wondering how/why he was anointed to be in the limelight in the first place (but then again, I wonder that about him most of the time).

How do you do, fellow NFT owners

Inside the Realms of Ruin

The gold rush over NFTs caused some otherwise smart people to attempt to implement them in regrettable ways. Numerous companies announced NFT-adjacent projects, like using them to tokenize fanfic, in-game items, Discord things(?), and so on. After failing to read the internet in general’s skepticism of this interesting but at present highly dubious tech, the companies backpedaled madly, sometimes within hours of announcements or rumors. Literally anyone would have said it was a bad idea, try asking next time!

Bezos thanks everyone for their money, which he shot into space

Image Credits: Joe Raedle / Getty Images

The relentless self-congratulatory fanfare around Blue Origin and Virgin Galactic’s first “real” trips to space was extremely tiring. While there was some relief in Branson’s company getting grounded for shady maneuvers, and in Bezos eliciting scorn for his tamales and his giant hat, the chef’s-kiss moment was the latter’s tone-deaf thanks offered to the world that financed his ego trip by shopping at his ethically bankrupt mega-corporation. “I want to thank every Amazon employee, and every Amazon customer, because you guys paid for all this.” I’m sure he meant every word, which is why it’s so bad. (Also pity the poor cowboy hat, which Bezos has definitely also ruined for me.)

Blue Origin whining postpones the next Moon landing

After losing big time on the Human Landing System contract to arch-rival SpaceX, Blue Origin sued NASA, alleging impropriety. Its claims were dismissed in a highly embarrassing manner (NASA basically pantsed the company in front of the entire industry) but the necessary rigmarole resulted in the planned 2024 crewed lunar landing being pushed out to 2025. To be fair, we all suspected this would be the case anyway, but Blue presented itself as a perfect scapegoat. The blunder may have permanently tainted relations with NASA, which isn’t great when they’re pretty much Blue Origin’s only source of real money… other than “every Amazon employee, and every Amazon customer,” of course.

OnlyFans bans itself

OnlyFans bans explicit content

We all know what OnlyFans is for, and it’s been great seeing a platform where sex workers, among others, can monetize themselves. Until that platform abruptly announced that the people who’d made it rich in the first place were henceforth banned. Bye, good luck! The backlash was so severe that the decision, unconvincingly blamed on prudish bankers, was reversed within a week. Don’t bite the hand that feeds you, people. (Unless the hand consents as part of a healthy fantasy.)

From the desk of Donald J. Trump

Trump’s tempestuous relationship with social media is perhaps too serious a matter to treat of here, but one aspect of it deserves a palm to the face, and that’s his short-lived “social” platform, From The Desk of Donald J. Trump. This barebones microblog appeared after his ouster from every major social media network, but it was so minimally functional and got so little traffic that it only lasted a month or so before being mothballed. No doubt so his media team could focus on borrowing Mastodon’s code for the follow-up, Truth Social. But even that was all just preliminary to the desperate-looking pitch deck and SPAC we would receive later in the year. As they say, if at first you fail badly, fail, fail again.

Senator Blumenthal asks Facebook rep to “commit to ending finsta”

Now known as the Facebook whistleblower, Frances Haugen leaked thousands of internal documents from her former employer, including some showing that Instagram is aware of its adverse effect on teenage girls. Soon after, Facebook Global Head of Security Antigone Davis was summoned to testify before the Senate about children’s internet safety.

Senator Richard Blumenthal (D-CT), a 75-year-old, was worried about young people using secret accounts that they hid from their parents.

“Will you commit to ending finsta?” he asked.

“Senator, let me explain. We don’t actually do finsta. What finsta refers to is young people setting up accounts where they may want to have more privacy,” Davis patiently replied.

Facebook’s leaked benefits enrollment video

It must be hard to work at Facebook – or, as it’s called now, Meta – on days when the company is getting loads of bad press for, you know, not doing enough to stop the January 6 insurrection. But it’s also probably hard to work at Facebook when you have to enroll in your benefits.

There’s some pretty awful stuff detailed in the files that Haugen leaked, but if you want to experience some lower-stakes incredulity at our Metaverse overlords, check out this video. I’m sure Facebook has good benefits – they’re a huge, trillion-dollar tech company, after all – but is the subsidized care even worth it when there’s choreographed dancing involved?

NFTs aren’t even good at gatekeeping

Bored Apes Yacht Club is like a fraternity for people who love Coinbase. Instead of paying dues to join an exclusive Greek society of bros, you can buy a 52 ETH (~$210,000 at time of publication) NFT of an ape to be part of a cool club. Yes, Jimmy Fallon, Steph Curry and Post Malone are Yacht Club members – just like how some B-list actor was in your college’s fraternity twenty years before you were born. But it’s not just about the ape – the value of the NFT is that you get access to fancy events and stuff. So, nightlife journalist Adlan Jackson concocted a clever plan to sneak into a Bored Apes party.

As it turned out, a friend’s boss owned an Ape and sent Jackson a screenshot of a QR code that could get them into the party. The bouncers were checking for some wristband from a previous event, though, not the literal NFT, so he was turned away despite his Ape possession. Later in the night, Jackson tried to get in again, and… they simply let him in. No wristband, no NFT, no nothing. So much for exclusivity! Luckily, Jackson was just in time to see The Strokes frontman Julian Casablancas ask on stage, “This is kind of about art, right? NFTs? I don’t know, what the hell. All I know is… a lot of dudes here tonight.”

Please make it stop

GameStop, meme stocks, and the revenge of the retail trader

If NFTs are now blowing up in the speculation bubble that is financial social media (how does that not have a short name? FiSo?) they owe a lot to Gamestop, the memestock that could. The company could have headed into oblivion like so many other mediocre retailers crowded out by innovations in technology, consumer habits and changing tastes in entertainment. But instead, it was picked up and carried on the wings of a wave of hype that drove its price into the stratosphere, leading to so, so many questions about who gets to be the gatekeeper in the world of trading, who makes money, and who are the biggest losers. You hate to see people getting manipulated, but also understand why those who bought in hated to be treated like unempowered peons. No one gets covered in glory in this one. But amazing, there has yet to be a final chapter in this saga: the stock is lower compared to January’s stratospheric peak, but it’s not that far off.

Spotify Wrapped is cheugy

Yeah, yeah, we know that sharing your Spotify Wrapped round-up is basically just doing free PR for Spotify. But the copywriting on Wrapped read like it was penned by a forty-year-old communications staffer who asked his niece for some phrases that gen-Zers like.Spotify even hired an aura reader named Mystic Michaela to collaborate with them on generating audio auras. The result? Cheugy.

“There was one podcast that lived in your head, rent-free, all year long,” it said.

“You always understood the assignment.”

“While everyone else was trying to figure out what NFTs were, you had one song on repeat.”

“You deserve a playlist as long as your skincare routine.”

Elizabeth Holmes has stans

Former Theranos founder and CEO Elizabeth Holmes was on trial for criminal fraud for over four months this year. But on the first day of the trial, some fans – yes, fans – showed up dressed as Elizabeth Holmes. If you’re blonde, it’s a pretty easy costume – just wear a black turtleneck and some red lipstick, put your hair in a low ponytail, and there you go! You’re ready for the Halloween party!

But these cosplayers were legit, as far as the reporters who talked to them could tell. They really admired Elizabeth Holmes, despite the fact that she may or may not be guilty of serious criminal fraud charges running a company that actively jeopardized people’s health by giving them false blood test results. But to each their own.

Even LinkedIn wants to be like TikTok

Basically every social or entertainment platform is finding a way to wedge in a vertically-oriented short form video feed. It makes sense for direct TikTok competitors like Instagram or Snapchat to do this, even though it feels very inorganic and derivative. But toward the end of the year, even companies like Netflix, Spotify, Reddit, Twitter and Pinterest were trying it out. In 2022, Linkedin plans to join them.

The professional networking platform tried doing stories this year, but it wasn’t as successful as Instagram at integrating that Snapchat copy-cat feature.

Fleets fly away

Twitter is shutting down Fleets on August 3, citing low usage

Then again, Twitter didn’t do so hot with Fleets either. I guess you could have seen the writing on the wall with this one: Twitter basically sealed Fleets’ fate with its very name. Its own attempt to throw a hat into the short, ephemeral videos never quite struck a note with Twitter users, who mainly love the format precisely for what it does differently from the rest of social media: fast-paced, short punctuations of words and pictures that flutter down from each other with biting humor, searing criticism, perfectly-timed factoids and occasional glimpses of greatness, regardless of your follow numbers. Who really needs another Story format? Especially one launching so late in the day, with no great twist or even easy way to be used?

Instagram forgot to turn on teen safety features on the web

In July, Instagram tried to cover its metaphorical ass when it comes to user safety by rolling out some new features. One feature made it so that any new account from a user under 16 would default to private. But Senator Marsha Blackburn (R-TN) put tech journalists to shame by unearthing a scoop that was right in front of our eyes for months. If a teen made an Instagram account on the web, it defaulted to public.

To be fair, who even uses Instagram for the web? Still, this felt like a pretty big oversight. Head of Instagram Adam Mosseri had to admit under oath that his team messed up. It was pretty cringe, but at the same time, it’s an alarming, lackadaisical error for a company that’s been repeatedly defending its commitment to teen safety in the Senate this fall.

The headline of this article

It was Devin’s idea. Amanda enthusiastically approved. Still cheugy.



When fundraising, New Zealand startup founders should play the ‘Kiwi card’

When fundraising, New Zealand startup founders should play the ‘Kiwi card’

New Zealand, a country of 5 million people in the South Pacific, has witnessed a shifting tech startup landscape over the last couple of years. While some major global companies like Xero, Rocket Lab, LanzaTech and Seequent have shined a spotlight on New Zealand’s startup scene, the country historically hasn’t had access to much venture capital.

As a country with an economy that primarily exports agricultural products, the New Zealand startup world has usually relied on funding from a community of high-net-worth individuals and family offices who probably made their millions through real estate or farming.

In March last year, the New Zealand government launched Elevate, an NZD $300 million fund of funds program that’s been providing millions to local VCs to invest into the startup community to fill the early-stage capital gap. At the same time, foreign investors have been flooding onto the scene, attracted to the small country that has a reputation for producing great companies. Founders and VCs in New Zealand are hopeful that the increase in funding from multiple sources is a signal that technology might just become the country’s next big industry.

That is, if the momentum that has led to more early-stage capital continues.

We spoke to two founders (Peter Beck of Rocket Lab and Cecilia Robinson of Au Pair Link, My Food Bag and Tend) as well as two investors (Phoebe Harrop, principal at Blackbird Ventures, and Robbie Paul, CEO of Icehouse Ventures) to nail down the top tips for New Zealand founders looking to put their mark on the markets. Here’s what we learned.

Think big and back yourself

New Zealanders typically tend to have an introspective view, failing to think big and globally from day one, Beck said. This is in part due to the fact that Kiwis grow up in a culture that suffers from “tall poppy syndrome,” a phenomenon where people who have achieved any measure of success are derided, cut down or sabotaged. As a result, not many people want to be a tall poppy.

Play the Kiwi card. New Zealand sits favorably on the minds of the international community. Icehouse Ventures CEO Robbie Paul

“If you’re going to build a company, it’s incredibly painful, it takes a lot of work,” Beck told TechCrunch. “Why would you waste your time building a little company? Let’s build a big company. So go after big problems.”

In order to psych yourself up to tackle those big problems, don’t be too humble. New Zealand consistently punches above its weight and produces world-class entrepreneurs and tech startups, Paul said.

“Back yourself and know you can win on a global stage,” Paul told TechCrunch. “While starting on a rock at the bottom of the world comes with challenges, there are plenty of advantages, too.”

Don’t get starry-eyed over a big check

“Remember that the least valuable thing an investor ever gives you is their money,” said Beck. “As you think about building your business, how and where you want to go, make sure you utilize investors to help you get there. People get starry-eyed by the check and don’t really sit back and go, ‘Well, is this person actually strategic to me or not?'”

When Beck was building Rocket Lab, he was highly selective about the investors he brought in, saying the differentiating factor between investors is not their capital, but rather who they can call. For example, Khosla Ventures participated in Rocket Lab’s Series A round, which Beck said opened the door to another big VC, Bessemer, to invest, in a Series B. DCVC led the Series C, but by the time Rocket Lab got around to its Series D, Bessemer was paving the way to Greenspring, which is a limited partner (LP) of Bessemer. Sovereign wealth funds, where the real big checks come from, participated in the company’s E round, and they were LPs of Greenspring.

“So as your company continues to grow, there are larger and larger pools of capital that you can then go and attract, and if all you’ve got is John from Pakuranga, John doesn’t have the phone number and credibility to sovereign wealth funds,” said Beck. “It’s all about setting up the company so that when you want to do a bigger round, you can go and tap that venture capitalist’s LPs and then it can tap that LP’s LPs and ultimately end up in sovereign wealth funds or others that can write a $100 million check no problems at all. It’s a smooth path there, and where it’s tricky is when there’s no path or the path is truncated, and the challenge with New Zealand is even though there are some better quality venture capital firms in New Zealand, where are their relationships with LPs?”



Let’s talk CES 2022 trends

Let’s talk CES 2022 trends

I spent a chunk of yesterday morning rediscovering the big trends of CES 2012. It’s a strange experience, examining so much technology that feels — at once — extremely dated and very recent. With 10 years between you and an event, the macro trends really take shape. Some items are a clear part of a continuum that brings us to the present day. Even more often, however, these things prove to be a kind of evolutionary dead end.

Even so, there’s a lot we can learn in the moment. CES is billed as a bellwether for the year to come. It also demonstrates how the tech world responds to largely global trends, in a one-stop shop. And let’s be real, there’s really one key global trend from the past couple of years that’s going to drive what happens at the show in every way imaginable.

Over the past few weeks, we’ve received some pushback on our coverage of big-name drop-outs from the in-person portion of the event. To some degree, I understand — or at least can empathize with — the criticism of focusing coverage on COVID-fueled exits, rather than the manufacturer news tied to the event. To that I say, simply, we’ll be covering that, too, only we’ll be doing it next week when it’s actually announced at the show (albeit remotely).

In the lead up to the show, however, we can identify/predict the industry trends that are best poised to define CES — and, perhaps by extension, 2022.

First, the elephant in the room.

CES drop-outs

As I write this the list of big-name tech companies that have announced they will be opting out of (or dramatically scaling back from) in-person events includes: GM, Google, Microsoft, AMD, OnePlus, MSI, Lenovo, Intel, T-Mobile, AT&T, Meta, Twitter, Amazon, Proctor & Gamble, Mercedes, BMW, Panasonic, IBM, TikTok and Pinterest. The media side includes TechCrunch, Engadget, The Verge, CNET, PCMag, Tom’s Guide, Tech Radar and more.

It’s not exactly a full list — but it’s surely a lot more than the CTA hoped for. There are, however, still some big names participating, including Samsung, Sony, LG and Qualcomm. Given the late stage at which many companies opted out, those who attend the show are due for a surreal experience, full of big-name, unstaffed booths.

CES dodged the shutdown bullet in 2020 by the skin of its teeth. 2021, meanwhile, felt like a referendum on whether a hardware event at this scale can go entirely virtual. Based on our own experiences of navigating the show online, the answer was decidedly a no. With the CTA planning a return to an in-person event for 2022, I will be interested to see whether the organization has dramatically improved the experience for those who won’t be in Vegas.

Connected fitness

The last few years have been huge for this category — for what should be obvious reasons. Mirror was acquired by Lulu Lemon, Peloton had a banner couple of years (in spite of numerous setbacks) and the funding flowed for a range of different home fitness suppliers. This was fueled by widespread gym closures, coupled with the general inactivity of those forced to stay at home.

There’s been some regression for companies as gyms have reopened in different parts of the country and world, but with the arrival of troubling variants like delta and omicron, many have remained committed to their home workout routines.

Bonus: Expect more startups trying new wearable form factors, including rings, after Oura proved out success on that side. Mindfulness and sleep will also be focuses, in addition to more traditional health tracking.

Robots

As someone who writes a lot about robots, it’s heartening to see them playing an increasingly important role at CES. That includes moving beyond sheer novelty and tried and true form factors like robot vacuums. My list includes exoskeletons, elder tech, agtech, prosthesis and — at the very top — disinfecting robots. There are going to be a TON of these, driven by an increased focus on surface-based disease transmission during the pandemic and the fact that it’s reasonably simple to mount UV-C light panels to an autonomous robot that can take laps around an office.

Bonus: With last-mile delivery robots taking off in a big way, expect to see a number of newer companies getting in on the act during the show.

Lidar

Okay, so Velodyne has opted out of the in-person event, but between robotics, self-driving cars and drones (among others) the demand for lidar is massive. Expect to see a lot of new offers from companies at the show — both new and old.

Bonus: It’s going to be a big year for e-bikes, too. Mark my words.

Remote work

This one’s a bit nebulous, I confess, but the pandemic had a profound impact on the category. After years of decline, PC and tablet sales shot up, as people scrambled to build home offices. Even after nearly two years in isolation, there’s still a lot that needs improving with our home setups. If you started building solutions like webcams, lighting, conferencing devices and microphones at the beginning of the pandemic, CES 2022 would be a great place to debut them — for many reasons.

Bonus: For the (large number)th year in a row, smart home stuff will occupy a huge portion of mindshare for the show.

CES 2022 kicks off next week. We’ll be there (virtually), so stay tuned.

Read more about CES 2022 on TechCrunch



The Equity team’s 2022 predictions

The Equity team’s 2022 predictions

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

As is tradition on the show, we used the last episode of the year to make predictions about the next year. To continue an annual tradition, Grace and Chris joined Natasha and Mary Ann and Alex on the mic, a rare treat and one simply for your enjoyment. Expectedly, they had a lot to say.

So what did we manifest for 2022? Here’s a sampling:

  • We’re bullish on climate-focused startups: A notable theme from a number of us was the importance of climate startups, and how many types of startups are going to have a climate-flavor. In short, as the planet changes, it’s going to touch just about everything. And if sustainability is not your entire pitch, it’s going to be at least a strategy soon enough.
  • We had a lot to say about crypto: Sure, we’re all a bit tired of talking crypto, but there’s also no chance that we could get away from the topic when considering next year. The classic tension between reinvention and regulation continues to be a dynamic we all care about, and predict will be full force over the next twelve months.
  • We’re not nearly as bullish on media: The Buzzfeed SPAC had some of us bummed out, but when it came to creators and not just writers, we were a bit more positive. Everything is media, even if everything doesn’t make money.
  • Space is controversial: We won’t spoil it, but the space chat got a bit spicy. The argument wound up showing an interesting issue in the tech space, namely is all the money going to where it will have the greatest impact?

A big hug from the Equity team for your continued listenership this year. Thanks for sticking with us, and we’re back in a heartbeat with another year’s shows – some of which may even be in person!

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 a.m. PST, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts!


Thursday, 30 December 2021

Mercedes, BMW, more join list of companies opting-out of an in-person CES

Mercedes, BMW, more join list of companies opting-out of an in-person CES

Two more auto giants have added their names to the growing list of big companies opting out of an in-person CES with less than a week remaining before kickoff. Yesterday, Mercedes confirmed that it would be skipping the physical event.

“As the health and safety of our customers, partners, employees and guests are our highest priority,” the company said in a statement. “Due to the large group of participants and the different country-specific regulations, a solid, safe and harmless planning for all participants is unfortunately not be feasible in the current situation. We deeply regret this decision but consider it necessary.”

Today, BMW followed suit, issuing a media release, announcing a shift to a virtual press conference. The carmaker’s statement was short and sweet, noting, “For many years, the BMW Group has been presenting innovations at the Consumer Electronics Show (CES) in Las Vegas. Due to the pandemic situation, the BMW Group will move all planned media activities at CES to a fully digital program livestreamed from Germany.”

Lidar company Velodyne, meanwhile, issued a full press release about its decision this week, stating:

Velodyne Lidar will not participate in person at CES 2022 due to the surge in COVID-19 infection rates. The health and safety of employees, partners and the public are the topmost priorities for Velodyne and were the primary factors in the company’s decision.

Early today, IBM also confirmed its decision to extract itself from the in-person event in a statement to TechCrunch:

Due to the evolving COVID conditions, and out of an abundance of caution, IBM will not participate on-site at CES in Las Vegas this year. We look forward to participating in the event virtually.

Also newly out is Panasonic, which had planned an in-person press conference for January 4. The company has shifted to a virtual event and will only have a limited presence at the show.

Those companies join GM, Google, Microsoft, AMD, OnePlus, MSI, Lenovo, Intel, T-Mobile, AT&T, Meta, Twitter, Amazon, Proctor & Gamble, TikTok, Pinterest and a number of major media outlets, TechCrunch included. The decision to jump ship over mounting omicron concerns is likely an especially difficult one for startups, who rely on shows like CES to get noticed. I have, however, been contacted by a growing number of smaller companies who have made the difficult decision to stay home.

The Consumer Technology Association — which runs CES — has stood firm in its plans to go ahead with the show, which starts January 5 (with media days on the 3 and 4).

“CES 2022 will be in person on January 5-8 in Las Vegas with strong safety measures in place, and our digital access is also available for people that don’t wish to, or can’t travel to Las Vegas,” the org said in a statement issued December 22. “Our mission remains to convene the industry and give those who cannot attend in person the ability to experience the magic of CES digitally.”

On Christmas Day, the Las Vegas Review Journal ran an op-ed from CTA head Gary Shapiro headlined “CES will and must go on in Las Vegas,” which accused media of “tell[ing] the story only through their lens of drama and big name companies.”



The year the tide turned on ransomware

The year the tide turned on ransomware

This year was rife with ransomware. 2021 witnessed the attack on IT software company Kaseya that knocked 1,500 organizations offline, the CD Projekt Red hack that saw threat actors make off with source code for games including Cyberpunk 2077 and The Witcher 3, and several high-profile attacks targeting big-name tech companies, from Olympus to Fujitsu and Panasonic.

It was also the year that hackers seized global attention by targeting critical infrastructure, hacking American oil pipeline system Colonial Pipeline, meat-processing giant JBS and Iowa New Cooperative, an alliance of farmers that sells corn and soy, to name just a few.

After the attacks led to prolonged shutdowns, inflated oil prices and ran the risk of food shortages, the U.S. government began to take notice — after years of inaction — and scored some rare wins in what once seemed like an unwinnable battle against the ransomware epidemic.

It began in April when the Department of Justice formed the Ransomware and Digital Extortion Task Force. The move, which followed what the DOJ described as the “worst year” for ransomware attacks, aimed to prioritize the “disruption, investigation, and prosecution of ransomware and digital extortion activity.” The task force declared its first victory two months later when the DOJ announced it had arrested 55-year-old Latvian national Alla Witte and charged her for her role in “a transnational cybercrime organization” that was behind TrickBot, one of the most well-known and widely used banking trojans and ransomware tools.

An even bigger win came just days later when the DOJ announced it had seized $2.3 million in bitcoin that Colonial Pipeline paid to the DarkSide ransomware gang to reclaim its data. Since then, the U.S. government has offered a reward of up to $10 million for information that helps identify or track down leaders of the notorious ransomware group.

At the same time, the Treasury Department announced sanctions against the Chatex cryptocurrency exchange for facilitating ransom transactions, just weeks after taking similar action against the Suex crypto exchange.

The biggest win for the Task Force came in October with its disruption of the notorious REvil ransomware gang. Prosecutors announced they had charged a 22-year-old Ukrainian national linked to the gang that orchestrated the July ransomware attack against Kaseya, and said it had seized more than $6 million in ransom tied to another member of the notorious ransomware group.

The U.S. government’s efforts to target ransomware groups this year were applauded by many, particularly for its tactic of following the money. Chainalysis, a provider of blockchain transaction analysis software, lauded the Treasury’s action against Suex as a “big win” against ransomware operators, telling TechCrunch that dismantling the mechanisms for ransomware groups to cash out their cryptocurrency would be vital in slowing them down. Morgan Wright, chief security advisor at SentinelOne, said that without removing the main incentive — financial gain — ransomware gangs will continue to operate and expand.

Read more on TechCrunch

“Attackers will always have the advantage because they don’t have to follow the rules or the law. However, there are two approaches that could seriously impact the ability of transitional ransomware gangs to achieve their goals — removing the ability to use cryptocurrency for ransoms and machine speed responses to machine speed attacks,” said Wright.

The U.S. government also offered rewards for information on ransomware tactics, like the $10 million bounty for information on DarkSide, and the subsequent reward for intel on REvil. “With rewards this large, there’s a substantial incentive for these criminals to turn on one another. This action undermines trust across the ransomware as a service affiliate model,” Jake Williams, CTO at BreachQuest, told TechCrunch.

But some believe that while the government’s actions have undoubtedly scared off some, it’s unlikely to disincentive ransomware gangs that continue to reap the financial rewards.

“While I applaud law enforcement efforts to bring those responsible for ransomware attacks to justice, the likelihood of apprehension and jail time simply does not outweigh the large sums of money being made by these criminal groups,” said Jonathan Trull at Qualys, an IT security company. “Unfortunately, the battle against ransomware is an asymmetric one, meaning there simply is not enough law enforcement resources globally to deal with the volumes and complexity of investigations needed.”

Wright agreed, and was less than impressed by the U.S. government’s activity so far: “Arresting two people and recovering a few million dollars isn’t a victory over ransomware. This is more of a political statement to ’show’ something is being done about ransomware. $2.3 million isn’t even worthy of a rounding error when you look at the billions of dollars already lost.”

Similarly, many believe that these tactics will unlikely be enough to fend off the growing threat of ransomware as we enter the new year, particularly as threat actors adapt their own. Experts believe that the ransomware-as-a-service (RaaS) model — in which operators lease out their ransomware infrastructure to others in return for a percentage of the ransom proceeds — will continue to thrive in 2022, making it more difficult for law enforcement to track down operators.

Others expect multi-staged attack chains — the breaches that start with a phish and lead to data theft and eventually ransomware — to become more prevalent, which could enable hackers to infiltrate even the most well-protected network infrastructures.

The latter will likely lead to the U.S. government collaborating more closely with the private sector in 2022, according to Trull. “Law enforcement alone is not going to turn the tide, in my opinion. It will need to be a combination of enforcement actions paired with dedicated efforts to harden systems, develop, and operationalize backups of key data and systems, and effective response from the private sector.”

While it’s clear that more action is needed, the U.S. government is making progress. While a handful of prosecutions has been mocked by some, it’s clearly had an impact — particularly on ransomware groups’ ability to advertise and recruit potential partners. In the wake of this unwanted attention, ransomware was banned from several popular hacking forums, leading to one hacking group setting up a fake company to lure unwitting IT specialists into supporting its continued expansion into the lucrative ransomware industry.

“Ransomware gangs are less welcome on certain cybercrime forums than they once were,” said Brett Callow, a ransomware expert and threat analyst at Emsisoft.

6 things in cybersecurity we didn’t know last year



Voyant raises $15M to scale production of its tiny, inexpensive lidar tech

Voyant raises $15M to scale production of its tiny, inexpensive lidar tech

The future of lidar is uncertain unless, as Voyant hopes to do, its price and size are reduced to fractions of their current values. As long as lidars are sandwich-sized devices that cost thousands, they won’t be ubiquitous — so Voyant has raised some cash to bring its smaller, cheaper, more easily manufactured, yet still highly capable lidar to production.

When I wrote up the company’s seed round back in 2019, the goal was more or less to shrink lidar down from sandwich to fingernail size using silicon photonics. But the real challenge faced by nearly every lidar company is getting the price down. Between a strong laser, capable receptor and a mechanical or optical means of directing the beam, it just isn’t easy making something cheap enough that, like an LED or touchscreen, you can easily put several of them in a vehicle that costs less than $30,000.

CEO Peter Stern joined the company just as COVID was getting started, and they were looking for a way to turn a promising prototype developed by co-founders Chris Phare and Steven Miller into a working and marketable product. After going back to basics they ended up with a photonics-based frequency-modulated continuous wave (FMCW) system (just go with it for now) that could be manufactured at existing commercial fabs.

“Every other system is filled with a lot of expensive stuff — our vision is a mass-produceable chip, like anything else,” he said, and noted the lack of a powerful precision laser as a huge savings to cost and space. “What people use as a laser source generally costs a lot, needs assembly and calibration, there are lens issues… our laser sources are basically out of date, slightly refurbished datacom lasers the size of sesame seeds. These things cost like $5 each, the laser path costs $30, something like that.”

This tiny scale is made possible by the FMCW method, used more often in radar. A continuous beam of light encoded with identifiable data patterns and constantly adjusting its frequency, this approach avoids many issues with traditional lidar methods. And the way Voyant does it, it’s cheap — possible to get under a hundred bucks with scale. All the optics, beam handling and sensing and so on is right there on the chip.

Close-up of some of the waveguides found on the lidar chip. Image Credits: Voyant Photonics

But they’re not going up against Velodyne or any of the upstart lidar companies duking it out in the automotive sector like Luminar and Baraja. “We’re too underfunded to take us through an automotive development cycle,” Stern said — and indeed it’s quite an expensive market to try to break into. “Because we’re cheaper, we see applications in robotics, mobility, industrial safety… anywhere someone wants to use a Velodyne puck, we can displace them for non-automotive purposes pretty quickly.”

You may very well think “wait, I have lidar on my phone — what’s different about this?” Certainly you can make lidar units at this scale and size, but their capabilities are extremely limited. Great for scanning your living room, but unreliable past a few meters or in sunshine or bad weather. Voyant isn’t going for cars, but its devices still have auto-grade specs: millimeter accurate out to a hundred meters, the sort of thing you want when you’re traveling 70 MPH.

Lidar startup Aeva raises another $200M ahead of its debut as a public company

The FMCW technique (also used in Aeva’s lidars) produce fewer points, leading to lower resolution, but it provides instantaneous doppler velocity. Knowing how fast the thing your beam hit is moving without having to expend extra scanning power or computation is arguably a big plus.

Another interesting leg up it has on the competition is in the unit’s ability to discern not just distance and velocity, but at least to a certain extent material. This uses a measure of polarization, a factor of the beam that is affected in different ways by different surfaces. So from a single data point, Voyant’s devices should be able to tell whether something is metal, asphalt, wood, skin, clothing or fur — among other things. That’s unbelievably useful for categorizing objects — if it has fur on it, it’s probably not a tree or a car, right?

Block diagram of the Lark lidar test kit.

Block diagram of the Lark lidar test kit. Image Credits: Voyant Photonics

The $15.4 million A round was led by UP.Partners, with participation from LDV Capital and Contour Ventures. The company plans to use the money to move toward production by putting its development kits in the hands of partners. The “Lark” is the more traditional of the two, bouncing the laser signal off a galvo mirror, while the “Sparrow” unit uses a 2D beam steering technique that further reduces the need for mechanical components.

Stern said they’ll be making about 200 units for partners in 2022, and then will start taking commercial orders in 2023. By that time the automotive world may have taken note, but if Voyant’s strategy succeeds, it will have slipped a good piece of the industrial market out of reach of companies making larger, more expensive units.



The best tech of CES 2012

The best tech of CES 2012

Consumer electronics are a bad metric for gauging the passage of time. And, frankly, Consumer Electronics Shows are considerably worse. I’ve attended well into the double digits of CES and have largely experienced them in similar manner: as a week-long flurry of news and shiny gadgets, filing news from trailers, press centers, hotel rooms and convention center hallway floors in a sometimes quixotic attempt to define the year’s trends.

The halls of the Las Vegas Convention Center and its many satellite Expo Halls and hotel suites are thick with the ghosts of good intentions and forced obsolescence. That’s the nature of the category. Some of the devices that have become our daily drivers over the past decade debuted at CES, but more often than not, devices come and go — if they ever end up making it to store shelves in the first place.

CES 2022 will be a strange one — a fact that has more to do with extenuating global circumstances than anything happening on the show floor (though, last I heard, one of the Backstreet Boys will still be on hand to show off home boxing equipment). Questions around the relevance of in-person conferences pre-dated COVID-19, of course — though CES has always felt like an exception, owing to the importance of being in the same room with the hardware being announced.

After narrowly missing pandemic-related shutdowns in 2020, CES 2021 was a dry run for what an all-virtual future might look like. The results were…half-baked. CES 2012, on the other hand, had none of those issues. After a bit of dip in previous years (owing to a global recession), the show boasted its best-ever attendance of 153,000. The growth would continue over the next several years, as the event continued to take over Vegas, peaking again at around 182,000 in 2019, according to the CTA.

In 2012, CES still felt like something of a phone show in a way that no longer exists. Between Mobile World Congress the following month and the decision for many of the big companies to follow in Apple’s footsteps by announcing their flagships on their own time, CES isn’t the same epicenter of phone news it once was. Though that void has been quickly filled by other categories in the subsequent decade — including, most notably, automotive, which has moved front and center.

Color-coded cables run into the radio unit of Sprint Corp. 8T8R equipment, the multiple antenna technology which combines eight-transmit and eight-receive radios at a cell site to boost the performance of Sprint’s LTE TDD 2.5 GHz spectrum, on a rooftop in Chicago, Illinois, U.S., on Wednesday, Aug. 13, 2014. Sprint reported its first quarterly profit in more than six years in July, with sales that topped analysts’ estimates, after holding onto more subscribers than projected. Photographer: Daniel Acker/Bloomberg via Getty Images.

LTE was everywhere at CES 2012, much like the 5G bombardment of a few years back. CNET even went so far as saucily calling the show a “4G Orgy” in a headline. Five years after Sprint demoed Wimax in Vegas for the show, it was officially ready to jump ship and join the rest of the world in LTE-land. The Sony Xperia S grabbed headlines, as did the Droid 4, Motorola’s valiant attempt to keep the physical keyboard alive five years after the first iPhone marked the beginning of the end of the BlackBerry’s reign.

Image Credits: TechCrunch

But the show truly belonged to one of two LTE-sporting Windows Phone devices announced at the show. The HTC Titan II may have been the first device on the OS to sport the next-gen wireless technology, but the Nokia Lumia 900 captured attendees’ imaginations with a 4.3-inch AMOLED display, 8-megapixel rear-facing camera, 512MB of RAM and an eye-catching design.

A year prior, straight-talking CEO Stephen Elop compared the company’s woes to a man standing on a burning platform in the middle of icy waters. The partnership with Microsoft was Nokia’s leap. A year later, Nokia would sell off its mobile division to Microsoft.

Like the Droid 4’s valiant — if ultimately doomed — attempt to hang onto the QWERTY keyboard, Sony’s Bloggie was a last gasp for standalone blogging camcorders. This was a year after Cisco shut down its Flip Video business, after acquiring the then-red hot pocket camcorder in 2009 for $590 million. Leave it to Sony to say “screw it,” and attempt to squeeze the last few embers from a dying category.

Image Credits: TechCrunch

And then there were the ultrabooks. If the category can be said to have had a moment, it was those five days in Las Vegas. By mid-year, the stories about the death of the category had already begun. Coined by Intel and announced at Computex 2011, the category was the latest thin-and-light classification — really, an attempt for PC-makers to offer their own take on the MacBook Air.

Intel offered strict guidance for the category, focused on things like thinness, weight and battery life. The category was, ultimately, cost-prohibitive and doomed by ever shifting goal posts of specs and the rise of smartphones and tablets.

Image Credits: TechCrunch

At CES 2012, desktop 3D printing was the future, and MakerBot was front and center. The NYC-based spinout of the RepRap open source project used the show to debut the Replicator. A significant improvement over its previous Thing-O-Matic system, the system sported a Star Trek-inspired name and felt like a major step toward a dream of a 3D printer in every home.

Pricing, technical limitations and the arrival of more advanced technology from companies like Formlabs damped the fortunes of many companies in the space, in what ultimately proved a fairly massive tech hype bubble. A year later, MakerBot was acquired by 3D printing giant Stratasys, which has focused on the technology for the educational market.

As always, CES brings plenty of concepts that seem destined to stay conceptual. The Samsung Smart Window is pretty much par for the course on that front. The transparent window display with touchscreen functionality captured the eye of many show goers in an era where everyone seemed to want everything to be a giant screen, but never seemed to make it much further than CES booth dressing. As a footnote, the company has since invested in an artificial smart window as part of its C-Lab initiative, because, again, the consumer electronics industry is a weirdly cyclical one, for all of its talk about forward progress.

Ten years out, CES 2012 may appear more miss than hit. Certainly the most hyped products tend to be the ones that suffer the most in hindsight. We never made it to 3D printers and smart windows in every home, but hey, LTE had a pretty good run.

Read more about CES 2022 on TechCrunch



Not every creator economy startup is built for creators

Not every creator economy startup is built for creators

Ten years ago, if you were a scrappy kid somehow making a living off of YouTube ad revenue and brand deals, you were probably told you didn’t have a real job. Now, if monetizing your creative output is how you pay your rent, you’re part of the creator economy, a buzzy new industry.

An often-cited landmark report from the venture capital firm SignalFire says that creators are the fastest-growing type of small business. Despite the creator economy only really forming a decade ago, there are now 50 million people who consider themselves “creators,” and more American children want to be YouTube stars (29%) than astronauts (11%), per SignalFire. So it makes sense that more and more startups are cropping up to provide tools for creators — it’s an opportunity to cash in on a growing market, and savvy entrepreneurs want to make money.

As this market has expanded, I’ve written about credit card companies for creators, community-building tools and companies that help you design a product to sell, among other ventures. But as my inbox teems with too many creator-focused startup pitches, products and opportunities to ever even consider, I’ve noticed a troubling trend — not all of these businesses are actually good for the creators they intend to serve. Some might actually be pretty predatory.

For example, if an all-in-one creator platform folds, what does that mean for creators who put all their eggs in that basket? How do major tech acquisitions impact the people who monetize on those platforms? As venture capitalists invest in creators as though they’re startups, how can those creators protect themselves from exploitative terms and conditions?

Startups need to have a backup plan to make sure that if they don’t become the next Patreon, the creators who trusted them won’t be doomed.

Startups need to have a backup plan to make sure that if they don’t become the next Patreon, the creators who trusted them won’t be doomed. I’ve started asking these questions to any startup that purports to be a “one-stop shop” or an “all-in-one solution” to the creator economy. Fourthwall had a good answer.

The company said that it has three months of emergency operating expenses set aside to ensure that if they were to fail, they could help transition creators to other platforms. Fourthwall also said it would also make its platform open source if this were to happen. But regardless, this friction isn’t exactly helpful.

The inherent tension within the creator economy lies between the promise of financial freedom and the realization this freedom comes at a cost. As more startups aim to connect talent with brand deals, build monetization tools and develop new social platforms, creators need to know what to look out for to avoid a bad situation — and startups themselves need to think as though they’re in a creator’s shoes, understanding that if a creator trusts them with their business, then they have a moral and financial obligation not to screw it up.

‘A platform is not your friend’

When Spotify bought the popular podcast creation service Anchor in 2019, podcasters panicked. But Amanda McLoughlin, CEO of the independent podcast collective Multitude Productions, had seen massive acquisitions like this happen before. Since the early days of YouTube, McLoughlin has been a creator herself, so she’s seen the industry change from both creative and business perspectives. One defining moment in her early life as an internet creator was when Google bought YouTube in 2006.

“Before 9 a.m., I got a dozen messages from friends and colleagues worried about what such a large and unexpected consolidation means for those of us trying to make a living in podcasting,” McLoughlin wrote at the time. So she rehashed the lessons she learned from the YouTube acquisition: Diversify your income streams, don’t trust individual platforms too much and believe in your own value.



Yukai Engineering’s cute stuffed animal robot will nibble on your finger

Kris Holt Contributor
Kris Holt is a contributing writer at Engadget.
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It wouldn’t be CES season without at least a couple of offbeat robots showing up. Yukai Engineering, the maker of the Qoobo robotic cat tail pillow, has revealed a soft robot that nibbles on a user’s fingertip. The company hopes the “somewhat pleasing sensation” will brighten up your day.

Amagami Ham Ham has an algorithm called a “Hamgorithm” that selects one of two dozen nibbling patterns, so you’ll never be sure exactly what you’ll feel when you shove your digit into the robot’s maw. Yukai designed the patterns — which include Tasting Ham, Massaging Ham and Suction Ham — to replicate the feeling of a baby or pet nibbling on one’s finger.

 

A soft robot called Amagami Ham Ham
Yukai Corporation

“Amagami” means “soft biting” and “ham” means “bite” in Japanese. Yukai based the look of the robot on a character from Liv Heart Corporation’s Nemu Nemu stuffed animal series. There’ll be a couple of finger-munching models to choose from: Yuzu (Calico Cat) and Kotaro (Shiba Inu).

“Most people like the nibbling sensation but know they need to teach their children or pets to stop it, because kids and animals will otherwise bite them with full force eventually,” said Yukai Engineering CMO Tsubasa Tominaga, who invented the robot at a hackathon earlier this year. “Amagami Ham Ham is a robot that frees humankind from the conundrum of whether ‘to pursue or not to pursue’ the forbidden pleasure.”

Pricing hasn’t been determined, but Yukai and Liv Heart plan to run a crowdfunding campaign in the spring. In the meantime, those braving CES can check out Amagami Ham Ham at the show, and perhaps leave Yukai’s booth with a slightly more tender finger.

Among the other devices Yukai will show off at CES is Bocco Emo. The company has updated the original Bocco robot to act as a smart medical device. Yukai says hospitals in Japan are using it to monitor patients’ vitals (via connected sensors like pulse oximeters and thermometers) and notify nurses about a patient’s condition.

During a pilot period, Bocco Emo was used to inform patients’ families about how they’re doing. It can also communicate with patients using sound effects, facial expressions and gestures while they wait for a nurse to arrive.

Editor’s note: This article originally appeared on Engadget.



African tech took center stage in 2021

African tech took center stage in 2021

Two years ago, the African tech ecosystem saw newfound attention from global players that translated to the continent’s best year of receiving venture capital. From varying sources, it is estimated up to $2 billion went into African tech startups in 2019.

With high-profile visits from the most famous Jacks (Ma and Dorsey), a long-awaited first IPO by e-commerce giant Jumia and massive $100 million rounds, it was a sign of things to come for African tech.

But two months into 2020, the pandemic did an excellent job of lowering expectations as investment activities from local and international investors slowed down.

It wasn’t a bad year, though. African startups nearly raised $1.5 billion and saw a couple of fascinating exits: Stripe-Paystack and WorldRemit-Sendwave.

Entering 2021, the bullishness of African tech stakeholders returned — and why not? As businesses reopened globally and the pandemic drove people to adopt new habits in e-commerce, work, spending money, online delivery, and learning, venture capital into various industries was poised to increase immensely, and Africa would not be exempt.

Predictions were made on how much the continent’s startups would raise in December. AfricArena, a tech ecosystem accelerator, pegged deals to close between $2.25 billion and $2.8 billion. Stephen Deng, the co-founder and partner of DFS Lab, a firm that invests in digital commerce startups, serially compared the 2016 Southeast Asia funding landscape to where Africa might be in 2021, at $3 billion.

Venture capital investment in Africa predicted to reach a record high this year

These predictions weren’t entirely off the mark. In the end, information from the likes of Maxime Bayen and Briter Bridges made 2019 numbers look like child’s play. 2021 was when African tech reached an inflection point and took center stage as companies raised over $4 billion (more than they got in 2019 and 2020 combined).

From minting five unicorns to witnessing more million-dollar raises by female CEOs, we spotlight some of the events that shaped this pivotal moment in African tech.

What’s a record year of funding without some unicorns?

Attaining unicorn status — a privately held company with a valuation of $1 billion — is undoubtedly one of the vainest achievements for any startup, yet it remains the most coveted.

In Africa, the first two unicorns were Jumia (in 2016) and fintech giant Interswitch (in 2019). As Jumia went public on the NYSE in 2019, it ceased to be a unicorn and became a typical billion-dollar publicly held company.

It’s a similar case with Egyptian payments company Fawry. It went public on the Egyptian stock market (the first indigenous tech company to do so on African soil) in 2019. However, unlike Jumia, Fawry only reached a billion-dollar valuation a year after going public. So, it isn’t and technically wasn’t a unicorn.

Interswitch was the continent’s sole unicorn until five more were minted this year. Four are fintechs: Flutterwave, OPay, Wave and Chipper Cash, while one is tech talent marketplace Andela.

Flutterwave got its horn in March at $1 billion; OPay in August at $2 billion; Wave and Andela the following month, at $1.7 billion and $1.5 billion, respectively; Andela in September raised at a $1.5 billion valuation; Chipper Cash in November at $2 billion. Meanwhile, Interswitch, the sole unicorn between 2019 and 2021, is worth $1 billion.

A couple of reasons are behind this sudden surge in unicorn numbers on the continent. More experienced founders exist and specific markets, particularly in the Big Four (Nigeria, South Africa, Egypt and Kenya), show a mix of matured but still open-for-disruption traits.

Also, sectors such as fintech keep opening up in ways never seen before and there’s a rush of foreign money from first-time investors in early and later stages, simultaneously.

International investors participated from pre-seed to Series E stages

While global investors have previously invested in African startups, their activity seemed more prominent in 2021, probably because of their participation across the board.

For instance, investors such as Berlin-based VC firm Target Global and renowned investment firm and hedge fund Tiger Global cut checks across early and growth stages.

Target invested in both Series A rounds of Kuda and Mono (including the Series B round of the former). The European VC also led the pre-seed rounds of Kippa and Edukoya. On the other hand, Tiger led Union54’s seed round, Mono’s Series A and later rounds in FairMoney and Flutterwave.

Other deals where growth firms participated in early and growth stages included Sequoia in Telda’s pre-seed; Wave’s Series A, via stealthy wealth management fund Sequoia Heritage; and OPay’s Series C, via its subsidiary fund Sequoia Capital China.   

Faster deals, less diligence: The African startup market mirrors its larger rivals

There was also action from other investors, such as Dragoneer, FTX, Fidelity, SVB Capital and Sam Altman, who got involved in single large deals for the first time. It was routine for other firms like Tencent as it invested in the growth rounds of uLesson, Ozow and TymeBank– and SoftBank, who, via its Vision Fund 2, led two of the continent’s many nine-figure rounds in 2021: unicorns Andela and OPay.

African startups raised more $100M+ rounds this year than ever before

OPay had one of the three nine-figure deals in 2019 after raising a $120 million Series B round. Others included Andela’s $100 million and Interswitch’s $200 million deals. So imagine the surprise the following year when no nine-figure deal took place (just as the continent didn’t produce any unicorn).

The draught didn’t last long, as Africa not only had its highest unicorn year but also recorded the most nine-figure rounds (11 from 10 startups) in a single year.

Let’s start with the unicorns: Flutterwave’s Series C was $170 million; OPay raised a $400 million Series C; Wave and Andela each picked up $200 million. Then Chipper Cash did the double: a $100 million Series C and a $150 million extension for its unicorn round months later.

Others include TymeBank’s $180 million Series B, Jumo and MNT-Halan’s $120 million rounds, TradeDepot’s $110 million and MFS Africa’s $100 million.

The only non-fintech deals were Andela and TradeDepot (although the latter has an embedded finance play). Also, all but two deals were solely equity-based: TradeDepot and MFS Africa raised a mix of equity and debt.

A handful of local acquisitions and a monumental exit

Digital payments gateway MFS Africa is one of Africa’s few corporate investors and acquirers. Over the past five years, the company has made strategic bets across overlooked startup regions in Africa, investing in Julaya, Maviance and Numida. And in terms of acquisitions, Beyonic and, most recently, Baxi.

Last year, the trend of seeing local companies buy each other played out and continued into 2021. Some interesting acquisitions include TLcom-backed Kenyan consumer experience platform Ajua buying WayaWaya; Nigerian bus booking and Techstars-backed Treepz expanding into Ghana and Ugabus after getting Stabus and Ugabus; and Flutterwave making a foray into the creator economy space with the Disha acquisition.

Others include Jiji’s acquisition of Cars45, Egypt’s B2B e-commerce platform MaxAB purchasing YC-backed Waystocap, thus expanding into Morocco, and Cheki selling its businesses in Kenya and Uganda to Nigeria’s Autochek.

Like the MFS Africa-Baxi deal — which both parties claimed to be the second-largest fintech acquisition in Africa after Stripe-Paystack — the other acquisitions listed were undisclosed. 

Why African startups don’t disclose their acquisition figure is a topic for another day. Personally, reporting such deals may not be appealing going forward (if they remain undisclosed) unless they involve international expansion plays. Case in point: Nigerian healthtech Helium Health acquiring UAE’s Meddy (the first of its kind between sub-Saharan Africa and the GCC) and Australian BNPL player Zip buying up South Africa’s PayFlex.

And international expansion via acquisition gets more exciting when a figure is attached; for instance, data center Equinix announced that it would acquire Nigeria’s MainOne, for $320 million. The news was the highlight for this year’s acquisition deals, not only for its size but also because MainOne is a female-led company, with Funke Opeke as its CEO.

More female-led startups raised million-dollar rounds

Funke Opeke is one of the very few founders to have come this far: running an African tech company to the point of exit. She’s also probably the only female founder on the continent to have raised nine figures cumulatively for her business.

Opeke’s experience is an outlier. In Africa and globally, funding doesn’t come easy for female-led companies. A report by Briter Bridges from the middle of this year looked at 1,100+ companies to have received VC money between 2013 and May 2021 (pegged at $20 million or less).

Per the report, only 3% of the $1.7 billion raised within this period went to all-female founding teams compared to 76% for all-male teams.

So, it’s great news when female-led startups raise a million dollars or more in Africa. And it indirectly contributes to how well the region performs, as we can attest to this year which recorded more than ten deals, signalling an improvement in VCs (both gender-focused and gender-agnostic) sourcing for female-led teams to invest in.

The female-led startups that raised a million dollars or more this year include Shuttlers, Bankly, Lami, Okra, Klasha, Akiba Digital, Ejara, Kwara, Edukoya, Reelfruit and Jetstream.

MainOne CEO Funke Opeke says Equinix is buying her company for the right price

Local investors — and founders — stepped up their game

Alitheia IDF is an investor in Reelfruit and Jetstream. The women-focused firm, led by principal partners Tokunboh Ishmael and Polo Leteka, is a $100 million private equity fund for gender-diverse businesses in Africa.

It’s also one of the local funds that raised huge sums of money this year to write checks for African startups across different stages. Others include Ventures Platform, LoftyInc Capital, Voltron Capital and 4DX Ventures, all sub-Saharan-based VC firms with a pan-African strategy.

Up north, investors such as Sawari Ventures and Algebra Ventures pulled their weight backing startups, particularly in Egypt, where startup innovation and investment has taken off astronomically.

Local and Africa-focused investors also took up entire seed to Series A rounds of some companies in sub-Saharan Africa (Appzone, Payhippo, to name a few), which rarely happened in previous years. Future Africa, Kepple Africa, Launch Africa, and others continued with their pace from 2020 and wrote many new and follow-on checks this year.

We even noticed how active founders like Flutterwave CEO Olugbenga’ GB’ Agboola, Paystack founders Shola Akinlade and Ezra Olubi, and Chipper Cash founders Ham Serunjogi and Maijid Moujaled took part in some early-stage rounds too.

Nigeria became the unicorn capital; Egypt, a powerhouse

In November 2019, three fintech companies, Interswitch, OPay and PalmPay, raised a cumulative $360 million from American and Chinese investors. That announced Nigeria as Africa’s unofficial capital for fintech investment and digital finance startups.

Fintech opportunity in Nigeria is the largest on the continent. With over 40% of Nigerian adults having bank accounts and digital payments hitting more than $250 billion in 2019, it’s no surprise that the startups facilitating transactions for the unbanked (OPay) and providing gateways (Interswitch and Flutterwave) are now worth more than $1 billion.

The three companies, including Andela, started operations in Nigeria’s commercial city, Lagos, earning Nigeria the status of Africa’s unicorn capital in 2021.

For a long time, Nigeria has been one of the three countries that receive the bulk of local and international venture capital, including Kenya and South Africa. The three countries present Africa’s most connected populace and growing economy; the perfect environment to attract foreign capital before others.

But then Egypt stepped into the picture in 2017, and with time, the North African country became part of the “Big Four” as the country began attracting venture capital eyeballs. And after quietly spending the last couple of years at the rear, Egypt picked up impressively in 2020 and this year surpassed Kenya to become the region’s third most active investment region.

As this report aptly put: “Seemingly from nowhere, Egypt is suddenly on the radar as a key African startup funding destination, highlighting the prospects for continental growth of the nascent sector.”

Egypt also has bragging rights in producing the first SPAC deal on the continent. In July, Cairo and Dubai-based ridesharing company Swvl announced that it was going public via a merger with Queen’s Gambit Growth Capital. It’s a deal that will value Swvl, one of the country’s success stories, at almost $1.5 billion once completed.

With a large population and impressive GDP per capita, the North African country raised almost $600 million this year. While it’s less than what Nigeria and South Africa raised at over $1.4 billion and $830 million, respectively, some observers predict that Egypt will surpass South Africa by next year if it keeps up with its pace.

There are a few reasons behind this thinking. In Nigeria, South Africa and Kenya, fintech is the sector that receives the most funding. The major sector is e-commerce and retail in Egypt, but the country is a hot spot for fintech, too, evident in holding the highest pre-seed rounds in both categories (Rabbit’s $11 million and Telda’s $5 million rounds).

When I wrote this piece earlier this year, the largest pre-seed round at the time was Autochek’s $3.4 million. Rabbit’s eight-figure pre-seed is thrice that amount. Sources recently told TechCrunch that another Egyptian startup will close a pre-seed round that high next year.

Mindblowing pre-seed investments like these are one of the many indicators of how fast venture capital has picked up in Africa. The continent’s startups raised over $4 billion this year and minted five unicorns. No one knows what to expect in 2022, but there’s a nuanced sanguinity that we would see “more of everything” including some IPOs (I might be reaching here) so brace yourselves.

How African startups raised investments in 2020



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