Month: May 2020

There is money in design tools, but do designers have a target on their backs?

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

What a week. Are you still standing? Did you make it? If you are upright and typing, congratulations, you’re top-decile. If you’re reading this from bed, that’s fine too. We understand.

The week was so busy that we actually ran a bit long this week, with lots left on the cutting room floor. So, with the full team aboard this week (Danny, Natasha, Chris, Alex), we got into the following:

We wrapped with a new Danny segment called “Luckin Watch” and will be back with a special ep on Saturday. Stay tuned!

Equity drops every Monday at 7:00 AM PT and Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

Cliqz pulls the plug on a European anti-tracking alternative to Google search

Cliqz, a Munch-based anti-tracking browser with private search baked in that has sought to offer a local alternative to Google powered by its own search index, is shutting down — claiming this arm of its business has been blindsided by the coronavirus crisis.

The bigger challenge is of course competing in a market so dominated by Google .

In Europe, where the tech giant’s search engine commands a marketshare approaching 95%, trying to lure users to an alternative ecosystem is difficult at the best of times, and a pandemic is certainly not that.

“We didn’t see a pandemic coming,” Cliqz wrote in a farewell blog post yesterday. “We didn’t expect that a virus could have impact on Cliqz. And even just one and a half months ago, we completely underestimated what this would do to the economy and even more so to the political priorities. It became clear to us in the last weeks, that all political initiatives to create an independent European digital infrastructure have been stalled or postponed for years. Covid-19 is overshadowing everything. This is not a climate where we will have any meaningful discussion about a public funding of a solution like Cliqz.”

It’s been a long road for Cliqz, which was founded back in 2008 — initially focused on German-speaking markets. The browser was a fork of Mozilla’s Firefox, and Cliq went on to take investment from Mozilla, in 2016, when it was eyeing expanding to more markets.

In 2017 it acquired the Ghostery anti-tracking tool, which had around 8 million users at the time, with the aim of combining algorithmic and blocklist anti-tracking approaches. But the wider challenge for Cliqz’s browser+search effort was not a lack of tech but the difficulty of building broad backing for its alternative approach.

The farewell blog post says the company failed to raise enough awareness among mainstream web users to convince them to step off Alphabet’s beaten path. But it’s also true that, in recent years, mainstream browsers have been baking in anti-tracking and steadily upping their own splashy privacy claims.

Even Google has said it will phase out third party cookie tracking in its Chrome browser — so the available space for ‘easy’ differentiation around privacy is shrinking. Unless you can clearly and powerfully articulate key technical nuance and complex wider market dynamics related to how user data is passed around in the background.

There is also ongoing regulatory failure in Europe around privacy, despite a recently updated data protection framework, with many national watchdogs failing to grasp the nettle of rampant unlawful online tracking.

The lack of GDPR enforcement against major tech and adtech platforms also means there’s been less succour for those businesses that are making privacy respecting choices than they might have been led to expect, having read the rules on paper.

“We failed to make people truly aware of the problem; we failed to reach a scale that would allow our search engine to be self-financing,” Cliqz writes. “We have reached several hundred thousand daily users. But — and this is the disadvantage of running our own technology — this is not enough to run a search engine, to cover our costs. And most of all, we failed to convince the political stakeholders, that Europe desperately needs an own independent digital infrastructure.”

While the Cliqz browser and search is being shuttered, the company is not closing down entirely — and a spokesman confirmed Ghostery will continue.

Cliqz investor, Hubert Burda Media, which holds a majority stake in the business, said Thursday that the resulting “restructuring” of the business will affect 45 employees — “for whom individual solutions are currently being sought”.

“The 100% Cliqz subsidiary Ghostery, headed by Jeremy Tillman, will continue to bundle Cliqz’s expertise in the area of ​​anti-tracking,” it wrote. “In addition, a team of experts will be formed from Cliqz, which will take care of technical issues such as artificial intelligence, search and the influence of technology on media.”

Burda added that it’s looking at a possible integration of Cliqz’s MyOffrz unit — aka the division that had sought to monetize use of the anti-tracking browser via contextually targeted (and thus privacy sensitive) ads.

In a wider statement on the restructuring, Burda CEO Paul-Bernhard Kallen said: “We have invested in Cliqz for years because we believe that Europe needs its own digital infrastructure to stay fit for the future. Without the necessary political structures at European level for this, however, we will not be able to overcome the superiority of the tech giants from the USA and China. In addition, the Corona pandemic is unlikely to lead to a far-reaching innovation program in Europe in the foreseeable future, so that we can no longer drive this path alone. I very much regret this because the basic idea of ​​establishing a counterweight to the USA and China in the European search sector is still the right one.”

Bó, the digital bank developed by RBS-owned Natwest, is to shutter

Bó, the digital bank developed by RBS-owned Natwest, is to shutter, just 6 months after launching publicly.

The incumbent bank’s consumer challenger brand was an attempt to build a startup within a larger bank and in the longer term compete with trendy upstart banking apps, such as Monzo, Revolut, Starling and others.

The initial “attack vector” was something akin to a companion banking app and card, with a focus on budgeting, rather than a fully-fledged salary account, although the original ambition was certainly to go a lot further over time. One more recent plan being considered was to reposition Bó as a banking app for teens, a segment thought to be underserved even amongst digital-first providers.

However, as part of announcing its yearly financials, RBS said it would “wind down Bó as a customer-facing brand,” Yahoo Finance reports.

Instead, the bank plans to focus on Mettle, its small business banking challenger brand, which, I understand, had already begun to assimilate Bó after the two respective teams were moved into the same building.

“The circumstances have changed,” RBS CEO Alison Rose told Yahoo Finance. “We’ve always said that we will look to innovate. Clearly in the current situation we’ve had to make prioritisation choices around where we should invest and what we should do to support our existing customers.”

Bó has around 11,000 customers, who are being given what looks like at least a month or two’s notice before their accounts are to due close.

Streaming service Hooq shuts down, ends partnership with Disney’s Hotstar, Grab and others

Hooq, a five-year-old on-demand video streaming service that aimed to become “Netflix for Southeast Asia,” has shut down weeks after filing for liquidation and terminated its partnerships with Disney’s Hotstar, ride-hailing giant Grab, and Indonesia’s VideoMax.

Hooq Digital, a joint venture among Singapore telecom group Singtel (majority owner), Sony Pictures, and Warner Bros Entertainment, discontinued the service on Thursday. It had amassed over 80 million subscribers in nearly half of the dozen markets in Asia.

“For the past 5 years, we gave you unbelievable thrills, heartrending drama, roaring laughs, awesome action, and more. Our goal was to bring you the best entertainment from here to Hollywood. Our hearts are full of gratitude for all of you who shared the journey with us,” it says on its website.

Hooq publicly disclosed that it had raised about $95 million, but the sum was likely higher. News outlet The Ken analyzed the regulatory filings last month to report that Hooq had raised $127.2 million, and its losses in the financial year 2019 had ballooned to $220, suggesting that it had received more capital.

The streaming service said last month that it could not receive new funds from new or existing investors.

Homepage of Hooq

The service counted India, where it entered into a partnership with Disney’s Hotstar in 2018 and telecom operators Airtel and Vodafone, as its biggest market. The company also maintained a partnership with ride-hailing giant Grab to supply content in its cab, and VideoMAX in Indonesia.

Hooq brought dozens of D.C. universe titles including “Arrow,” “The Flash,” “Wonder Woman” and other popular TV series such as “The Big Bang Theory” to its partners. In India, users began noticing last week that those titles were disappearing from Hotstar.

A spokesperson of Hooq told TechCrunch today that its tie-ups with all its partners including Hotstar have closed. A Hotstar spokesperson did not respond to a request for comment.

Mobile operator Singtel first unveiled Hooq’s liquidation in an exchange filing last month. The Ken reported that the filing left hundreds of employees at Hooq stunned who thought the firm was doing fine financially. Nearly every employee at Hooq has been let go, with select few offered a job at Singtel, according to The Ken.

In an interview with Slator earlier this year, Yvan Hennecart, Head of Localization at HOOQ, said that the company was working to expand its catalog with local content and add 100 original titles in 2020.

“Our focus is mostly on localization of entertainment content; whether it is subtitling or dubbing, we are constantly looking to bring more content to our viewers faster. My role also expands to localization of our platform and any type of collateral information that helps create a unique experience for our users,” he told the outlet.

Monzo recruits former Amex exec Sujata Bhatia as its new COO

More personnel changes are afoot at Monzo, as the U.K. challenger bank continues to bolster its leadership team.

Specifically, TechCrunch has learned that Sujata Bhatia, a former American Express executive in Europe, has been recruited as Monzo’s new Chief Operating Officer, replacing previous COO Tom Foster-Carter (who left the bank rather suddenly in November to found a startup of his own). Monzo confirmed Bhatia’s appointment, which is still subject to regulator approval, and I understand she is due to start the COO role in late June.

Prior to Monzo, Bhatia spent almost 16 years at American Express. Her most recent position at Amex was Senior Vice President for Global Merchant Services Europe. Before that she was Senior Vice President of Global Strategy and Capabilities, where, according to her LinkedIn profile, she lead a team of 400 people across 23 global markets.

Bhatia’s appointment follows the recruitment of Mike Hudack, the former CTO of Deliveroo and most recently a founding partner at London venture capital firm Blossom Capital. He joined Monzo in March as the challenger bank’s new Chief Product Officer. Going the opposite way was Meri Williams, Monzo’s Chief Technical Officer, who parted ways with the bank a few weeks later citing her wish to voluntarily help with “cost-cutting measures”.

Meanwhile, Bhatia joins Monzo at a somewhat turbulent time for the challenger bank, as it, along with many other fintech companies, attempts to insulate itself from the coronavirus crisis and resulting economic downturn, meaning that the new COO will likely need to hit the ground running.

Last month, I reported that Monzo was shuttering its customer support office in Las Vegas, seeing 165 customer support staff in the U.S. lose their jobs. And just a few weeks earlier, we reported that the bank was furloughing up to 295 staff under the U.K.’s Coronavirus Job Retention Scheme. In addition, the senior management team and the board has volunteered to take a 25% cut in salary, and co-founder and CEO Tom Blomfield has decided not to take a salary for the next twelve months.

Like other banks and fintechs, the coronavirus crisis has resulted in Monzo seeing customer card spend reduce at home and (of course) abroad, meaning it is generating significantly less revenue from interchange fees. The bank has also postponed the launch of premium paid-for consumer accounts, one of only a handful of known planned revenue streams, alongside lending, of course.

With that said, Monzo recently launched business accounts, many of which are revenue generating, with both free and paid tiers. I understand from sources that the number of business accounts opened to date already stands at approaching 20,000.

Related to this, having originally missed out on state aid via the capability and innovation fund designed to introduce more competition in SME banking, Monzo now has a second potential bite of the apple after previous grant winners Metro and Nationwide are returning the money.

As always, watch this space.

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