Month: June 2020

Lyft’s self-driving test vehicles are back on public roads in California

Lyft’s self-driving vehicle division has restarted testing on public roads in California, several months after pausing operations amid the COVID-19 pandemic.

Lyft’s Level 5 program said Tuesday some of its autonomous vehicles are back on the road in Palo Alto and at its closed test track. The company has not resumed a pilot program that provided rides to Lyft employees in Palo Alto.

The company said it is following CDC guidelines for personal protective equipment and surface cleaning. It has also enacted several additional safety steps to prevent the spread of COVID. Each autonomous test vehicle is equipped with partitions to separate the two safety operators inside, the company said. The operators must wear face shields and submit to temperature checks. They’re also paired together for two weeks at a time.

Lyft’s Level 5 program — a nod to the SAE automated driving level that means the vehicle handles all driving in all conditions — launched in July 2017 but didn’t starting testing on California’s public roads until November 2018. Lyft then ramped up the testing program and its fleet. By late 2019, Lyft was driving four times more autonomous miles per quarter than it was six months prior.

Lyft had 19 autonomous vehicles testing on public roads in California in 2019, according to the California Department of Motor Vehicles, the primary agency that regulates AVs in the state. Those 19 vehicles, which operated during the reporting period of December 2018 to November 2019, drove nearly 43,000 miles in autonomous mode, according to Lyft’s annual report released in February. While that’s a tiny figure when compared to other companies such as Argo AI, Cruise and Waymo, it does represent progress within the program.

Lyft has supplemented its on-road testing with simulation, a strategy that it relied on more heavily during COVID-related shutdowns. And it will likely continue to lean on simulation even as local governments lift restrictions and the economy reopens.

Simulation is a cost-effective way to create additional control, repeatability and safety, according to a blog post released Tuesday by Robert Morgan, director of engineering, and Sameer Qureshi, director of product management at Level 5. The pair said simulation has also allowed the Level 5 unit to test its work without vehicles, without employees leaving their desks and, for the last few months, without leaving their homes. Level 5 employs more than 400 people in London, Munich and the United States.

Using simulation in the development of autonomous vehicle technology is a well-established tool in the industry. Lyft’s approach to data — which it uses to improve its simulations — is what differentiates the company from competitors. Lyft is using data collected from drivers on its ride-hailing app to improve simulation tests as well as build 3D maps and understand human driving patterns.

The Level 5 program is taking data from select vehicles in Lyft’s Express Drive program, which provides rental cars and SUVs to drivers on its platform as an alternative to options like long-term leasing.

TransferWise to offer investment products but has ‘no plans’ to become a bank

TransferWise, the London-headquartered international money transfer service recently valued at $3.5 billion, has secured an additional license with U.K. regulators to enable it to offer investment products in the future.

This will mean that U.K. customers who have money deposited in a TransferWise multi-currency or so-called “borderless” account will be given the option to make that money work harder on their behalf. Total deposits currently sit at £2 billion, so there is quite a lot of customer cash potentially idle.

However, the company isn’t revealing much detail on its future investments product, except to say that it will initially offer “simple, affordable funds from reputable providers” so that customers can earn a return on their balances. Up to £85,000 of money held as investments within a TransferWise account per customer will be protected under the Financial Services Compensation Scheme. The new offering is still in development and will launch “in the next 12 months.”

Zooming out further, TransferWise says an increasing number of its 8 million customers are using the borderless account as an international banking solution. Around one million TransferWise debit cards have been issued since 2018, and the TransferWise account now also supports direct debits, instant international payments to friends, and Apple and Google Pay. With the addition of savings and investments, TransferWise says its vision is for the borderless account to replace “expensive, old-world international banking” for expats, freelancers and travelers.

“You and I have been talking since 2011, when you first reported that TransferWise was going live, and I think you’ll appreciate that over time we’ve expanded the features that TransferWise offers our customers, for sure,” co-founder and current CEO Kristo Käärmann tells me on a call. “We launched the borderless account to let people receive money in-roads and to hold money. We added the debit cards so that they can use that money that they hold in places where they can use the card. And this is, in some ways, no different.”

Sticking to broad brush strokes rather than specific product details (despite my persistent questioning), Käärmann says that after listening to customers TransferWise wants to help them hold their balance in a smarter way.

“Clearly they’ve already figured out that TransferWise works for them,” he says. “And not merely as a medium of sending money from one country to another but also to get paid internationally, to kind of run their international part of banking, if you like. For businesses, for freelancers, for ex-pats, for people that have just moved countries. So this is another feature along the same string of things that people want us to do for them.”

That, of course, begs the question: Does TransferWise have any plans to become an actual bank, with a full banking license, further adding to its existing permissions from regulators. Käärmann gives a pretty emphatic answer.

“No, we don’t have any plans to apply for a banking license,” he says. “We haven’t applied for any banking licenses anywhere in the world… The only thing that the banking license in Europe lets banks do is lend out the deposits that customers give them, and that’s not what our customers are asking for. They’re not asking us, you know, can you please lend out our deposits?”

In fact, Käärmann confesses to not being a huge fan of the predominant current account business model, which he believes serves the interests of banks, not account-holding customers. “I do think the way current accounts work with banks is not sustainable in the long term. That the money we keep in banks is being lent out to mortgages and business loans and overdrafts and so on, yet the customers holding that money, they’re not really getting much benefit from it. So why do it?” he asks, somewhat rhetorically.

Returning to the forthcoming investment product — and after a little more prodding from me — he says to expect it to have the same transparency as the company’s core money exchange offering, with clear pricing and working as hard for customers as possible. In line with TransferWise’s existing modus operandi, I would also expect it to be financially sustainable, rather than being cross-subsidised in order to pull customers in or grab easy headlines, which is common practice amongst many investments and savings products.

Adds the TransferWise CEO: “We want to be clear what the problem is we’re solving. [It] comes back to giving people a choice of where and how they hold their balances. And that might give you a hint of the product that we’re building. I can say now that we’re not building an active trading product, that’s not the goal. Our customers aren’t asking how can they speculate on the markets. There are tools for this, and they are increasingly [getting] better for this purpose. What we’re solving with the investments product is going to be a much more passive way of choosing where your balances sit.”

Elementary Robotics is making its quality assurance robots commercially available

Two years and over $17 million after it first began working on its robots for quality assurance, the Los Angeles-based Elementary Robotics has finally made its products commercially available.

The company already boasts a few very large initial customers in the automotive industry, consumer packaged goods, and aerospace and defense, including Toyota, according to chief executive Arye Barnehama. Now, the robotics technology that Barnehama and his co-workers have been developing for years is broadly available to other companies beyond its six initial pilot customers.

The company’s robots look like a large box with a gantry system providing three degrees of freedom, with vertical and horizontal movement as well as a gimbal-mounted camera that can visualize products.

Image credit: Elementary Robotics

As objects are scanned by the robots they’re compared against a taxonomy of objects provided by the companies that Elementary works with to determine whether or not there’s a defect.

Barnehama also emphasizes that Elementary’s robots are not designed to replace every human interaction or assessment in the manufacturing process. “Machine learning paired with humans always performs better,” says Barnehama. “At the end of the day the human is running the factory. We’re not really a lights out factory.”

Behind the new commercialization push is a fresh $12.7 million in financing that Elementary closed at the end of 2019.

The lead investor in that round was Threshold Ventures and the firm’s partner, Mo Islam, has already taken a seat on the Elementary Robotics board of directors, while existing investors Fika Ventures, Fathom Capital and Toyota AI Ventures, also participated in the round, which will be used to allow Elementary Robotics to continue developing and deploying its automation products at scale, the company said.

“Robotics and particularly robotics applied to manufacturing has been an interest of mine,” said Islam. In Elementary Robotics, Islam saw a company that could compete with large, publicly traded businesses like Cognex. The low complexity and ease of deployment of Elementary’s hardware was another big selling point for Islam that convinced him to invest. 

Elementary says that it can be up and running at a site in a matter of days and with businesses emphasizing cost-cutting and enabling remote work to ensure worker safety, companies are embracing the technology.

“That’s where we’re really excited to be launching it,” said Barnehama. “If we get parts or data examples we can get that up and running same day. We can usually show customers within that week we can start showing them the value of that as we get more and more data through the system.”

NASA pays out $51 million to small businesses with big ideas

NASA has announced its latest batch of small business grants, providing more than 300 businesses a total of $51 million in crucial early-stage funding. These “phase I” projects receive up to $125,000 to help bring new technologies to market.

The Small Business Innovation Research/Technology Transfer programs help entrepreneurs and inventors transition their work from lab to commercial availability. The money is like a grant, not an investment, and Phase I recipients are eligible for larger Phase II grants if they’re warranted.

This year’s selections, as always, cover dozens of disciplines and apply to a wide range of industries. Among NASA’s own highlights in a news release are high-power solar arrays, a smart air traffic control system for urban flight, a water purification system for use on the moon and improved lithium-ion batteries.

There’s even one award for a company making “a compact sterilizer for use on spacecraft materials” that could also be employed by health workers.

Perusing the lists I was struck by the number of neuromorphic computing efforts, from radiation-hardened chips to software techniques. I take these to be chips and approaches that utilize and accelerate machine learning methods, rather than attempts at computers that truly employ the spikes and plasticity of actual neuronal networks.

The 2020 Phase II announcements won’t come for a while — NASA just released 2019’s last month.

The SBIR program is one of the federal government’s inadvertently best-kept secrets, with billions allocated to a dozen agencies to distribute to small businesses. You can learn more at SBIR.gov.

Skygauge’s innovative tilting rotor drones are up for pre-order, with deliveries in 2021

I have had a few occasions to see Skygauge’s drones in-person, primarily on visits to Asia. The Canadian team is involved in HAX’s program and has spent time working out of their Shenzhen offices. In fact, they competed at our last hardware battlefield in the city late last year.

To a person, everyone I’ve spoken with seems impressed by the company’s tiltable rotor technology, which allows the massive industrial drones to maneuver in ways more traditional quadcopters can’t. I have little doubt the startup has had no trouble getting the attention of companies looking for an edge in the drone space, and like so many other robotics and robotics/drone/automation companies, it’s gotten a pretty significant boost in interest due to COVID-19.

Today the startup announced that it has opened pre-orders on its drones, with plans to launch in 2021 — it’s not disclosing pricing, but interested parties can plunk down a refundable $1,000 deposit. The company has already lined up “100 potential customers,” along with planned demos for 10 Fortune 500 companies. The pandemic, meanwhile, has opened up increased potential for these sorts of automated industrial inspection devices. The company notes a recent temporary FAA exemption for additional drone-based inspections of oil and gas sites in Texas, as workers are expected to stay home.

“Our goal is to get people out of dangerous environments and the need for this has never been greater because of COVID-19,” co-founder and CEO Nikita Iliushkin says in a statement.

Skygauge apparently maxed out its early adopter program during the pandemic. I’ll be curious to see if the company’s success ultimately lies in producing its own drones or licensing its impressive technology to third-parties. Meantime, it has raised $400,000 in pre-seed funding, with plans to raise more.

Dfinity demonstrates its TikTok clone, opens up its ‘Internet Computer’ to outside developers

Dfinity appeared in 2018, amid the flurry of investments in the blockchain space, It raised $102 million in funding at a $2 billion valuation in a round jointly led by Andreessen Horowitz and Polychain Capital, along with other investors including KR1. I must admit that at the time it appeared to all intents and purposes as if it would be yet another attempt to replace Ethereuem. Or at least something similar. But then something odd happened. It started behaving like an actual software company.

In January this year it didn’t talk about blockchain at all, but instead demonstrated an open social network called “LinkedUp” sort of open version of LinkedIn. The demonstration didn’t go live and technically-speaking it was under-whelming until you realized it wasn’t running or any server, and performed faster than a native mobile app. Dfinity, it turned out, wasn’t a traditional blockchain startup, but was taking a leaf out of that world’s championing of the move towards decentralization.

In fact, it was building its so-called “Internet Computer”: a decentralized and non-proprietary network to run the next generation of ‘mega-applications’.

Today it announced that the “Internet Computer” is now open to third-party developers and entrepreneurs to build that next generation. The vision is to “reboot” the internet in a way that destroys the ability to create virtual monopolies like Facebook, LinkedIn, Instagram, and WhatsApp.

As its next technical demonstration, it launched “CanCan”, a TikTok-like app that will run in a browser (though it is not publicly available as such) and which is not owned by a company. The idea is that anyone could build their own TikTok.

The tantalizing part of Dfinity’s ideas is that because of the nature of the architecture, apps like CanCan can be built with less than 1,000 lines of code. Facebook, to take an example, contains over 62 million lines of code.

To achieve this, Dfinity is drawing on the work of Andreas Rossberg, co-creator of WebAssembly, who has now created Motoko, a new programming language optimized for Dfinity’s Internet Computer.

The Internet Computer’s serverless architecture allows the Internet to natively host software and services, eliminating — claims Dfinity — the need for proprietary cloud services. Without web servers, databases, and firewalls, developers can create powerful software much more quickly, and that software then runs far faster than normal.

Dominic Williams, founder and Chief Scientist at DFINITY said in a statement: “One of the biggest problems emerging in technology is the monopolization of the internet by Big Tech — companies that have consolidated near-total control over our technologies. They collect vast amounts of information about us that they sell for profit and leverage to amass greater market share, and acquire or bulldoze rivals at an alarming rate… The Internet Computer provides a means to reboot the internet — creating a public alternative to proprietary cloud infrastructure. It will empower the next-generation of developers and entrepreneurs to take on Big Tech with open internet services. It aims to bring the internet back to its free and open roots — not dominated by a handful of corporations.”

This “Tungsten” release of the Internet Computer means third-party developers and entrepreneurs, will be able to start kicking the tyres on this platform and start spitting out web apps and even smartphone apps.

Projects currently being built include a decentralized payment application and a “pan-industry platform for luxury goods”, whatever that is. Successful and promising applications may also benefit from Beacon Fund, an ecosystem fund stewarded by the DFINITY Foundation and Polychain Capital that aims to support ‘DeFi’ apps and open internet services built on the Internet Computer.

Interested developers and enterprises can submit an application to access the Internet Computer starting July 1, 2020 via dfinity.org.

Facebook bans ‘violent network’ of far-right boogaloo accounts

Facebook took action to remove a network of accounts Tuesday related to the “boogaloo” movement, a firearm-obsessed anti-government ideology that focuses on preparing for and potentially inciting a U.S. civil war.

“As part of today’s action, we are designating a violent US-based anti-government network under our Dangerous Individuals and Organizations policy and disrupting it on our services,” Facebook wrote in the announcement. “As a result, this violent network is banned from having a presence on our platform and we will remove content praising, supporting or representing it.”

In its announcement, the company made a distinction between “the broader and loosely-affiliated boogaloo movement” and the violent group of accounts it identified and we’ve asked Facebook to clarify how or if it will distinguish between the two moving forward.

On Tuesday, Facebook removed 220 Facebook accounts, 28 pages 106 groups and 95 Instagram accounts related to the network it identified within the boogaloo movement. Facebook notes that it has been monitoring boogaloo content since 2019, but previously only removed the content when it posed a “credible” threat of offline violence.

The company cited real-world violence with ties to the boogaloo movement in its decision to more aggressively identify and remove this kind of content. Earlier this month, an Air Force sergeant found with symbols connected to the boogaloo movement was charged with murder for killing a federal security officer during protests in Oakland.

“… Officials have identified violent adherents to the movement as those responsible for several attacks over the past few months,” the company wrote in its blog post. “These acts of real-world violence and our investigations into them are what led us to identify and designate this distinct network.”

In an April report, the watchdog group Tech Transparency Project detailed how extremists committed to the boogaloo movement “[exchange] detailed information and tactics on how to organize and execute a revolt against American authorities” in Facebook groups, some private. Boogaloo groups appear to have flourished on the platform in the early days of the pandemic, with politicized state lockdowns, viral misinformation and general uncertainty fueling fresh interest in far-right extremism.

As the Tech Transparency Project report explains, the boogaloo movement initially used the cover of humor, memes and satire to disguise an underlying layer of real-world violent intent. Boogaloo groups have a mix of members with varying levels of commitment to real-world violence and race-based hate, but organizations studying extremism have identified overlap between boogaloo supporters and white supremacist groups.

Facebook’s action against the boogaloo movement come the same day that Democratic senators wrote a letter to the company demanding accountability for its role in amplifying white supremacy and other forms of far-right extremism. In the letter, addressed to Mark Zuckerberg, Lawmakers cited activity by members of boogaloo groups as part of Facebook’s “failure to address the hate spreading on its platform.”

What 👁👄👁.fm means for Silicon Valley

In 36 hours, a diverse group of young entrepreneurs and technologists raised more than $200,000 for three charities supporting people of color and the LGBTQ community: The Okra ProjectThe Innocence Project and The Loveland Foundation.

How did they do it? Why did they do it?

The answers are important to understanding the future of tech. This is the first real example of how and why Gen Z will build companies. 👁👄👁.fm and the people behind it reflect broader trends in youth culture.

VCs should take note. These are the people who will build the next Facebook.

Everyone else should rejoice. Young technologists are building a new future on a new set of values. Their values are informed by the first-hand experience of growing up with the perverse incentives of yesterday’s social media and a genuine desire to create a better world — online and off.

It all began on Thursday night when a group of friends started riffing on a TikTok meme. In today’s world, language is constantly evolving — 👁👄👁 emerged as a particular spin on the phrase: “It is what it is.” Josh Constine explains, “👁👄👁 means you feel helpless amidst the chaotic realities unfolding around us, but there is no escape.”

The group of friends added the emojis to their Twitter handles and began tweeting about 👁👄👁.fm, a nonexistent invite-only social app. Unexpectedly, the trend started gaining momentum and the inside joke got out of hand. Conversations erupted on the group’s Discord server as they discussed what to do next. Could they channel the hype into impact?

Vernon Coleman, founder of synchronous social app Realtime and “Head of Hype” at 👁👄👁.fm reflected, “What started as a meme quickly gained steam! We realized the opportunity and felt that we had a responsibility to convert the momentum for social good. I think it’s amazing what can happen when skilled creatives get together and collaborate in real-time.”

Where should the team focus their efforts? The answer was clear. The group wrote in a post on Friday, ” … we didn’t have to think too hard: In this moment, there’s pretty much no greater issue to amplify than the systemic racism and anti-Blackness much of the world is only beginning to wake up to.”

Since Thursday, the group accumulated over 20,000 email sign-ups, more than 11,000 Twitter followers and raised over $200,000 in donations.

Cynics have called it a “well-executed marketing campaign” or suggested that it was an ill-intentioned prank. Not everything went perfectly, and the team has acknowledged the missteps. But, we shouldn’t trivialize or marginalize what they accomplished and why they did it.

In one fell swoop, the team chastised Silicon Valley’s use of exclusivity as a marketing tactic, trolled thirsty VCs for their desire to always be first on the next big thing, deftly leveraged the virality of Twitter to build awareness and channeled that awareness into dollars that will have a real impact on groups too often overlooked.

This group of 60 young tech leaders took the tools of the titans into their hands to make an impact while making a statement.

They weren’t the most connected people on Twitter. Many of the team have follower counts in the hundreds, not the hundreds of thousands. But, they understand the tools as well as the tech elite.

This is the latest in a string of movements created by Gen Z leaders and activists. Gen Z is able to amplify their voice — even on platforms, like Twitter and Facebook, considered the domain of millennials and Gen X.

We first saw this with the Parkland school shooting when high school students took over Twitter then Facebook then cable news to add a voice of reason to a gun debate that had devolved into partisan talking points.

Over the last three years, I’ve spent dozens of hours talking with young users and product builders — this has been an important part of my job as the chief product officer at Tinder, a product director on Facebook’s Youth team and an angel investor. Many of the sentiments expressed by the 👁👄👁.fm team reflect broader feelings in Gen Z:

Gen Z is tired of a boomer generation that seems more focused on reaping their last bit from the world than passing it on in better shape.

Gen Z is fed up with exclusive clubs and virtual velvet ropes. The latest example is Clubhouse, an invite-only social app that raised at a $100 million valuation despite being only a few months old and catering to only a few thousand users — among them Oprah and Kevin Hart.

For tech insiders, Clubhouse is the place to be. For Gen Z outsiders, it’s the latest example of Black celebrity being used to make predominantly white founders and investors rich.

Gen Z entrepreneurs and tech leaders are tired of a tech industry that talks about inclusivity, but then uses exclusivity as a marketing ploy. This has been a practice for more than a decade. It started with Gmail, the first app to use private invites at scale — a tactic widely copied.

Today, Silicon Valley insiders are clamoring for invites to HEY, a recently released email app that notoriously charges for two- and three-letter email addresses ($999 per year for a two-letter address and $375 for a three-letter address). The short name up-charge is a cynical money-making scheme from a company whose founders, Jason Fried and David Heinemeier Hansson, evangelize a fairer and more empathetic approach to technology. Critics have pointed out that their business model unfairly — and likely unintentionally — targets ethnic groups who have a tradition of shorter names.

Finally, Gen Z is tired of a tech industry that talks about diversity, but doesn’t practice it. Black and Hispanic people continue to be underrepresented at major tech companies, particularly at the leadership level. This underrepresentation is even worse for entrepreneurs. Just 1% of venture-backed founders are Black.

Silicon Valley isn’t trying hard enough.

“We hear repeatedly that there’s a pipeline problem in tech VC and employment … that’s bullshit. We were able to bring together different age groups, cultural backgrounds, skills, genders and geographies … all based on a random selection process of people putting a meme in their profile … the Valley should realize that you can literally throw darts and get results,” said Coleman. “If the industry is about that action imagine the magic we’d all create together.”

The story of 👁👄👁.fm highlights an important truth. If the tech industry doesn’t create the future Gen Z wants, there’s no need to worry. They’ll create it for themselves.

Will you help them?

Make the hire. Send the wire. — Tiffani Ashley Bell, founding executive director at The Human Utility.

The team behind 👁👄👁.fm supports:

  • The Okra Project — a collective that seeks to address the global crisis faced by Black trans people by bringing home-cooked, healthy and culturally specific meals and resources to Black trans people wherever we can reach them.
  • The Innocence Project — its mission is to free the staggering number of innocent people who remain incarcerated, and to bring reform to the system responsible for their unjust imprisonment — a plight that disproportionately affects people of color.
  • The Loveland Foundation — makes it possible for Black women and girls nationally to receive therapy support. Black women and girls deserve access to healing, and that healing will impact generations.

Apple device management company Jamf files S-1 as it prepares to go public

Jamf, the Apple device management company, filed to go public today. Jamf might not be a household name, but the Minnesota company has been around since 2002 helping companies manage their Apple equipment.

In the early days, that was Apple computers. Later it expanded to also manage iPhones and iPads. The company launched at a time when most IT pros had few choices for managing Macs in a business setting.

Jamf changed that, and as Macs and other Apple devices grew in popularity inside organizations in the 2010s, the company’s offerings grew in demand. Notably, over the years Apple has helped Jamf and its rivals considerably, by building more sophisticated tooling at the operating system level to help manage Macs and other Apple devices inside organizations.

Jamf raised approximately $50 million of disclosed funding before being acquired by Vista Equity Partners in 2017 for $733.8 million, according to the S-1 filing. Today, the company kicks off the high-profile portion of its journey towards going public.

Apple device management takes center stage

In a case of interesting timing, Jamf is filing to go public less than a week after Apple bought mobile device management startup Fleetsmith. At the time, Apple indicated that it would continue to partner with Jamf as before, but with its own growing set of internal tooling, which could at some point begin to compete more rigorously with the market leader.

Other companies in the space managing Apple devices besides Jamf and Fleetsmith include Addigy and Kandji. Other more general offerings in the mobile device management (MDM) space include MobileIron and VMware Airwatch among others.

Vista is a private equity shop with a specific thesis around buying out SaaS and other enterprise companies, growing them, and then exiting them onto the public markets or getting them acquired by strategic buyers. Examples include Ping Identity, which the firm bought in 2016 before taking it public last year, and Marketo, which Vista bought in 2016 for $1.8 billion and sold to Adobe last year for $4.8 billion, turning a tidy profit.

Inside the machine

Now that we know where Jamf sits in the market, let’s talk about it from a purely financial perspective.

Jamf is a modern software company, meaning that it sells its digital services on a recurring basis. In the first quarter of 2020, for example, about 83% of its revenue came from subscription software. The rest was generated by services and software licenses.

Now that we know what type of company Jamf is, let’s explore its growth, profitability and cash generation. Once we understand those facets of its results, we’ll be able to understand what it might be worth and if its IPO appears to be on solid footing.

We’ll start with growth. In 2018 Jamf recorded $146.6 million in revenue, which grew to $204.0 million in 2019. That works out to an annual growth rate of 39.2%, a more than reasonable pace of growth for a company going public. It’s not super quick, mind, but it’s not slow either. More recently, the company grew 36.9% from $44.1 million in Q1 2019 to $60.4 million in revenue in Q1 2020. That’s a bit slower, but not too much slower.

Turning to profitability, we need to start with the company’s gross margins. Then we’ll talk about its net margins. And, finally, adjusted profits.

Gross margins help us understand how valuable a company’s revenue is. The higher the gross margins, the better. SaaS companies like Jamf tend to have gross margins of 70% or above. In Jamf’s own case, it posted gross margins of 75.1% in Q1 2020, and 72.5% in 2019. Jamf’s gross margins sit comfortably in the realm of SaaS results, and perhaps even more importantly are improving over time.

Getting behind the curtain

When all its expenses are accounted for, the picture is less rosy, and Jamf is unprofitable. The company’s net losses for 2018 and 2019 were similar, totalling $36.3 million and $32.6 million, respectively. Jamf’s net loss improved a little in Q1, falling from $9.0 million in 2019 to $8.3 million this year.

The company remains weighed down by debt, however, which cost it nearly $5 million in Q1 2020, and $21.4 million for all of 2019. According to the S-1, Jamf is sporting a debt-to-equity ratio of roughly 0.8, which may be a bit higher than your average public SaaS company, and is almost certainly a function of the company’s buyout by a private equity firm.

But the company’s adjusted profit metrics strip out debt costs, and under the heavily massaged adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) metric, Jamf’s history is only one of rising profitability. From $6.6 million in 2018 to $20.8 million in 2019, and from $4.3 million in Q1 2019 to $5.6 million in Q1 2020. with close to 10% adjusted operating profit margins through YE 2019.

It will be interesting to see how the company’s margins will be affected by COVID, with financials during the period still left blank in this initial version of the S-1. The Enterprise market in general has been reasonably resilient to the recent economic shock, and device management may actually perform above expectations given the growing push for remote work.

Completing the picture

Something notable about Jamf is that it has positive cash generation, even if in Q1 it tends to consume cash that is made up for in other quarters. In 2019, the firm posted $11.2 million in operational cash flow. That’s a good result, and better than 2018’s $9.4 million of operating cash generation. (The company’s investing cash flows have often run negative due to Jamf acquiring other companies, like ZuluDesk and Digita.)

With Jamf, we have a SaaS company that is growing reasonably well, has solid, improving margins, non-terrifying losses, growing adjusted profits, and what looks like a reasonable cash flow perspective. But Jamf is cash poor, with just $22.7 million in cash and equivalents as of the end of Q1 2020 — some months ago now. At that time, the firm also had debts of $201.6 million.

Given the company’s worth, that debt figure is not terrifying. But the company’s thin cash balance makes it a good IPO candidate; going public will raise a chunk of change for the company, giving it more operating latitude and also possibly a chance to lower its debt load. Indeed Jamf notes that it intends to use part of its IPO raise to “to repay outstanding borrowings under our term loan facility…” Paying back debt at IPO is common in private equity buyouts.

So what?

Jamf’s march to the public markets adds its name to a growing list of companies. The market is already preparing to ingest Lemonade and Accolade this week, and there are rumors of more SaaS companies in the wings, just waiting to go public.

There’s a reasonable chance that as COVID-19 continues to run roughshod over the United States, the public markets eventually lose some momentum. But that isn’t stopping companies like Jamf from rolling the dice and taking a chance going public.

SpaceX successfully launches GPS III space vehicle on behalf of the U.S. Space Force

SpaceX successfully launched a GPS III satellite for the U.S. Space Force today. The Space Force took over the U.S. in-space GPS assets from the Air Force when it became its own dedicated wing of the U.S. armed forces.

The launch employed a Falcon 9 rocket, the first stage of which was new and fresh from SpaceX’s factory floor. This launch did include a recovery attempt of the Falcon 9 booster, however, unlike the first GPS III launch that SpaceX launched in December 2018. SpaceX says that it was able to work with its customer to ensure that it could complete its mission as planned, while retaining enough reserve fuel for a recovery attempt – something that didn’t happen with the first launch.

That’s good news for SpaceX, since it means it won’t be losing that booster this time around, with a confirmed  successful controlled burn and landing on its floating drone landing ship at sea. That can now be refurbished and used again for future Falcon 9 missions.

The GPS spacecraft launched on this flight includes greater capabilities, better security and the potential to impact up to 4 billion users worldwide, the Space Force notes. It’ll enter a geosynchronous orbit and work with other existing GPS III satellites on orbit, as well as other existing earlier generation GPS satellites operated by the U.S.

SpaceX also says that its Ms. Tree and Ms. Chief ships will attempt fairing recovery at sea, not via catch but by fishing them out of the water. The fairing protects the satellite during the launch on its trip to space, and then falls back to Earth – where SpaceX generally tries to recover the pieces for later refurbishment and re-use.

The deployment of the satellite will occur around an hour and a half after launch, so while the launch has been successful, the full mission status will only be determined then. We’ll update this post with the results of that maneuver.

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