The Centers for Disease Control and Prevention (CDC) has issued updated, interim guidance for “critical infrastructure” employees during the ongoing COVID-19 pandemic that could have big implications for labor groups, gig economy workers, and tech company employees. The new guidance relaxes restrictions on employees who may have been exposed to COVID-19, focusing on implementing precautionary measures in the workplace rather than sending them home for self-isolation, as was the practice previously.
The CDC’s updated guidelines, which were adapted in order “to ensure continuity of essential functions” according to the agency, state that someone working in an essential capacity who has been potentially exposed (either through contact with a household member with COVID-19, or having come within 6 feet of someone who has a confirmed or suspected case) should remain at work, provided they don’t show any symptoms.
That’s not to say the CDC is advising they carry on as usual: they say that anyone who has had this kind of exposure, should have their temperature taken and their symptoms assessed prior to any shift, and that they should be engage in self-monitoring. They should also wear a mask whenever in their place of employment for at least 14 days following the exposure – including cloth masks where proper face masks aren’t available because of shortages. They should also observe physical distancing from other employees, and all shared use areas and equipment should be regularly cleaned and disinfected.
The CDC further advises that anyone who comes sick during the day should be sent home immediately, and the employer should comply a list of anyone they might’ve been exposed to within two days prior to the symptoms showing up.
These changed rules were mentioned during the White House coronavirus task force briefing on Wednesday, and seem to be considered a necessary step by the agency and the administration to ensure that critical services continue to operate uninterrupted as COVID-19 continues to spread. The guidelines apply not only to full-time employees in essential roles, but also to “contracted vendors,” which likely includes Amazon warehouse employees and delivery drivers for services like Instacart and Uber Eats.
The updated guidelines come as a number of labor actions have arisen with contract workers instituting work stoppages, facility closures or job walk-outs to protest COVID-19 working conditions and pay.
Startups are preparing for fundraising to become even harder to secure, due to a venture market slow down caused by COVID-19. The pandemic has led to less market activity, which means fewer liquidity deals for investors, which translates into less fresh capital (or dry powder) to put into startups.
As a result investors have told already-funded startups that they need to extend their runway until deal flow bubbles back up. Investors say this could take a couple of quarters, and looking at 2008 data, it could take a couple of years.
Canadian company Clearbanc has launched Clearbanc Runway, a new loan product to help startups secure money.
On Clearbanc’s website, founders can input the amount of their current runway, as well as cash balance, overhead, revenue, margin, growth rate and other criteria. Clearbanc will analyze the data and offer a loan in the form of non-dilutive capital. Founders can repay the loan through a revenue share agreement. In order to be eligible, companies must have a minimum of $10,000 monthly revenue and at least six months of consistent revenue history.
The revenue share agreement charges a 6%flat fee, with repayments already a part of the funding plan. And if the startup that has taken a loan is doing better month to month, the funding total that they can access will reflect that.
Clearbanc Runway is very similar to the company’s flagship product, the 20-minute term sheet.
Clearbanc created the 20-minute term sheet to help companies get non-dilutive capital for advertising spend on Google and Facebook advertisements. The premise there was that startups should spend valuable venture capital money on other expenses since equity is involved. Clearbanc Runway fulfills a broader goal.
“Originally, we were just focused primarily on ad spend. Now we can fund any expense that used to maintain your company, said Andrew D’Souza, the co-founder of Clearbanc.
The subtle difference between the two products is that the new launch has a hint of conservatism in it. Clearbanc is in a unique position during this pandemic because it largely funds e-commerce businesses. Those internet businesses are experiencing an increase in traffic as brick-and-mortar stores close amid the COVID-19 pandemic.
But, noted D’Souza, “there’s a lot of volatility and a lot of uncertainty.”
“We’re certainly going to be more conservative than we would have been six months ago. It probably looks like us writing smaller checks, more frequently.”
Clearbanc isn’t competing for deal flow with venture capital firms. Instead, the company is going up against fintech companies that loan money to small businesses. And that’s neither a rare or new focus.
Last month, Plastiq raised $75 million to help small businesses pay for items with credit as an alternative to traditional lending resources. Payment processing giant Stripe also has Stripe Capital, its lending product that gives money to internet businesses for a flat fee.
In January, Lighter Capital raised $100 million to lend money to other startups, similar to Clearbanc’s revenue sharing agreement format. It all comes to show that there are a lot of players willing to give out loans, and it’s up to small businesses to decide which terms are the friendliest.
Not all small business loans will be accessible for venture-backed startups. For example, the $2 trillion stimulus package provided by the U.S. government shows that $349 million was set aside to loan out to small businesses. However, new guidance shows that most startups are still excluded from getting monetary help. Still, some are applying for the loan because it will be distributed on a first come, first serve basis.
Clearbanc says it can differentiate from competitors because of its speed.
“It’s great that people apply for [SBA loans], but it can take a long time,” D’Souza said. “There’s a huge backlog and it depends on your bank and what their systems are set up to do.”
Almost exactly a year ago, Clearbanc’s co-founder Michele Romanow was talking in terms of IPOs and unicorns. Clearbanc Runway has noticeably less grandeur, as D’Souza was talking in terms of helping companies avoid shuttering or undergoing mass layoffs.
The firm has loaned over $1 billion across 2,200 companies.
Clearbanc has traditionally pitched itself as a way for e-commerce founders to grow their startups without giving up as much ownership as a traditional equity deal would include. Now, the company is pitching itself as a way for all founders to stay afloat, as venture capital becomes less of an option across the world.
Though the effects of the coronavirus pandemic on restaurants has been crystal clear, many forget the impact this disease has had on food chain suppliers. With restaurants closed, these suppliers — who still have access to tons upon tons of food — no longer have customers.
Meanwhile, end consumers are dealing with their own stresses around securing food, deciding between venturing out to the grocery store and ordering food through increasingly unreliable grocery delivery services.
That’s where Pepper comes in.
Pepper launched late last year with an enterprise product focused on connecting restaurants with their suppliers. Most restaurants have 6+ different suppliers, and manually placed orders with each of them individually each night either by email, voicemail or text message. Oftentimes, there was no confirmation that the order was received, with employees receiving orders and hoping that everything arrived on time as it was requested.
To digitize the industry, Pepper developed an app that let restaurants input the contact information of suppliers and place orders quickly, and then let those suppliers press a single button to confirm the order was received and in progress.
In the six months since launch, things have changed dramatically for the startup, which has led cofounder and CEO Bowie Cheung to rethink the business.
Alongside facilitating orders between restaurants and suppliers, Pepper has now opened up a consumer-facing portal called Pepper Pantry, allowing everyday users to place an order directly with a food supplier.
Folks pay a flat $5 payments processing fee on the platform, and can choose from fresh meats, produce, dairy and other categories to have food delivered directly to their home.
Of course, this involved considerable adaptation on the part of Pepper and their suppliers, who are used to shipping pallets of food rather than bags or boxes. However, it has created some jobs on the supplier side as folks repackage food to amounts that are suitable for families or individuals, rather than businesses.
Cheung says the portions are still ‘bulk’ but more on par with a Sam’s Club or Costco purchase than the types of orders restaurants were placing.
Suppliers are able to choose their minimum order amount, which can range between $0 and $150. Thus far, eight suppliers have signed on to the Pepper Pantry platform, serving the greater NYC area (NYC, NJ, CT) and the greater Boston area.
Pepper declined to disclose its total funding amount, but did share that it has received investment from Greylock’s Mike Duboe and Box Group.
Domestic stocks rose today in the United States, with all major indices opening higher.
TechCrunch has slowed its daily coverage of the US stock market as volatility has receded. We try to avoid covering the stock market too much, but there are days when doing so would be derelict. The value of public companies impacts the value of private companies like startups, so we have to pay at least some attention on days when shares rise or fall sharply.
Today’s opening normally wouldn’t qualify as sufficiently violent to warrant coverage. But what the open today misses in total movement it makes up in oddness: This morning the US government reported that 6.6 million individuals filed for unemployment in the last week, adding to the roughly 10 million that did so in the preceding two weeks. Canada’s March unemployment, out this morning as well, was similarly awful.
And the layoffs have continued, with Yelp this morning announcing around 1,000 layoffs and 1,100 furloughs. Startups are cutting staff at a pace not seen in a decade, the economy is broadly expected to enter a recession and venture capitalists are slowing their investment cadence as revenue losses rise and valuations are expected to dip.
All this is to say that if you don’t get what you are seeing in the ticker tape this morning, you’re not alone. What the fuck is going on? I don’t know.
But, I suppose, here’s where things are at start of the day:
More at the close.
The Los Angeles-based app development shop, V/One, is giving away 50,000 free mobile app builds through the rest of April as the company officially launches its platform for would-be, LA-based mobile app moguls.
Since its soft launch, December 20th of last year, the app development company has built over 100 new applications.
The company’s December launch featured an “app accelerator” and offered a guidebook for people who wanted to develop mobile applications to work with the development shop on early applications.
Under the terms of the development agreement, wannabe app creators get their application for free as long as they sign up for the monthly hosting service. “They can walk away at any time and cancel the hosting if they don’t want the app anymore. Builds of the apps will be delivered around 60 days upon signing up,” said V One founder, Jeremy Redman.
For founder Jeremy Redman, V/One was a business that solved a problem he had faced himself as an entrepreneur just starting out, but lacking the technical experience to build his own applications.
“I had an app idea but no real idea how to executive it. I’m non-technical, meaning I can’t code. I tried finding a technical co-founder but got abandoned when things got tough. Dev shops were too expensive and on the verge of predatory, and cookie cutter builders don’t address the designs I had in mind,” Redman said. “But, I wasn’t going to let someone tell me I couldn’t be a tech entrepreneur.”
The app development toolkit that V One uses was built entirely in-house to automate the build process on the back end, says Redman.
For small businesses, the plan is to charge $297 per month for app development and customization along with any future builds, hosting, and product support and maintenance. The company’s more robust place is a $997 per month package. Both offer the option to cancel anytime with the ability to own the code for the app.
“So far the only limitations are one’s creativity. Essentially speaking, if you can design it it can be made a functional app in our builder,” Redman wrote in an email. “If I had to put a constraint on it I would say we are not good at AR/VR and machine learning and some obscure features 99% of people don’t need [or] want.”
Redman thinks that roughly 98% of an app can be built using the company’s toolkit and then the final bit of coding and development (specifically for augmented or virtual reality — or other components) can be added in a final customization.
“If customers can describe their idea in one, clear sentence then it can be made in our builder and it can be made quickly,” Redman wrote. “What we don’t do is take pages and pages of details and make an app out of it. They can fill in the details later.”
V One uses a cross-platform framework, serverless technology and modern development practices to generate apps using an easy to use app builder, the company said. Users can think of it like Wix or WordPress for mobile app development.
“Never before has someone been able to build an app from just typing their idea out, let alone for this low a cost,” says Redman.
Ready or not, edtech has been shoved into the spotlight as millions of students shifted to remote learning due to pandemic-related school shutdowns.
But backing these companies are investors who have long believed that edtech was always set up for great returns and a big impact. We reached out to several to find out about which trends they’ve been willing to put their money behind. (And frankly, what we’ve been missing.)
We got into how tech can help — or hurt — underserved students struggling to find Wi-Fi or a laptop and how braintech still is ripe for innovation. Investors also shared the parts of edtech that Zoom video conferencing doesn’t address and why gamifying learning is so important.
Here’s who we talked to:
Next week, we’ll publish the other findings we received from these investors, focusing on edtech in a post-COVID-19 world.
Responses below have been edited for length and clarity.
What trends are you most excited about in edtech from an investing perspective?
GGV Capital is focused on how technology is allowing startups to innovate and create new business models to (1) lower the reliance on physical locations and (2) to allow for teachers to teach online with multi-format (1:1, 1:n) virtual classrooms [and] (3) deliver highly interactive and personalized content via use of virtual characters, machine learning, natural language and voice recognition/processing. Edtech can be broken down into the process of (a) learning (reading, speaking, comprehension), (b) practicing, and (c) testing, and targets different age groups from 0-3 years old, 3-6 years, K-12 years and into exam prep and adult training. Over the last four to five years, we have invested in over 10 companies in the areas of language learning, test prep, holistic learnings (like logical thinking, programming etc) and K-12 homework assistant.
How much time are you spending on edtech right now? Is the market under-heated, over-heated or just right?
It’s a key investment sector for me, so I spend about 20-30% of my time with edtech startups. Over the last few years, it has been a steady sector, not over-heated, but the COVID-19 situation has thrown a bright spotlight on it as a sector benefiting from more stay-at-home children and parents anxious to keep them busy, learning and engaged. I expect the sector to heat up quite a bit as we have seen our portfolio companies attract a lot of new users, new revenue and new interested investors over the last several months as much of the world manages lock-down mode. We expect this trend to continue for our US-based and Asia-based edtech startups as well.
Paidy, a Japanese fintech startup that allows customers to make online purchases without credit cards, announced today that it has raised a $48 million Series C extension from ITOCHU.
The company says it has now raised a total of $281 million in equity and debt. Its latest investment from ITOCHU, one of the largest Japanese trading companies, was equity funding. ITOCHU previously participated in Paidy’s Series B and C rounds, and this brings the total it has invested into the startup to $91 million (the company said it did an extension round instead of moving onto a Series D so it could issue the same type of preferred shares).
Paidy’s last funding announcement was in October 2019, with investors including PayPal Ventures. The company has now raised a total of $281 million in equity and debt.
The latest funding will be used to strengthen Paidy’s balance sheet during the COVID-19 pandemic and also support the development of more “buy now pay later” services it will launch later this year.
Paidy’s payment service allows users to make purchases online, and then pay for them each month in a consolidated bill. The company uses proprietary technology to score creditworthiness, underwrite transactions and guarantee payment to merchants. Since many Japanese consumers prefer not to use credit cards for online payments, Paidy’s service can help vendors increase their conversion rates, average order values and repeat purchases.
During the pandemic, the company says usage of its service has increased since more people are buying essential items online, despite declines in spending on travel, hotels and large-ticket items (a state of emergency was declared in Japan last week in Tokyo and six other prefectures).
Shuichi Kato, the executive officer and executive president of ITOCHU’s ICT and Financial Business company, said in a statement that, “We strongly beieve that they will keep playing a critical role in our retail finance strategy as their one-of-a-kind credit examination has been creating a new type of trust, appealing to a wide range of customers. Paidy has also proved that they are capable of implementing prompt solutions in the inevitable battles against fraud, evolving their services to the next level.”
Sony said on Thursday that it is investing $400 million to secure a 4.98% stake in Chinese entertainment giant Bilibili.
10-year old Bilibili started as an animation site, but has expanded to other categories including e-sports, user-generated music videos, documentaries, and games. The service, which has amassed over 130 million users, has attracted several big investors over the years, including Chinese giants Tencent and Alibaba.
The announcement pushed Bilibili’s share up by 7.6% in pre-market trading. Sony has made the investment through its wholly-owned subsidiary Sony Corporation of America.
In a statement, Sony said the company believes China is a key strategic region in the entertainment business. BiliBili says it targets China’s Gen-Z. The vast majority of its users — about 80% — were born between 1990 and 2009.
The two companies have also agreed to pursue collaboration opportunities in the entertainment field in China, including animation and mobile game apps, they said.
You can read more about Bilibili’s business and dominance in China in my colleague Rita Liao’s piece here.
France’s competition authority has ordered Google to negotiate with publishers to pay for reuse of snippets of their content — such as can be displayed in its News aggregation service or surfaced via Google Search.
Among various controversial measures the reform included a provision to extend copyright to cover content such as the ledes of news stories which aggregators such as Google News scrape and display. The copyright reform as a whole was voted through the EU parliament in March 2019, while France’s national law for extended press publishers rights came into force in October 2019.
A handful of individual EU Member States, including Germany and Spain, had previously passed similar laws covering the use of news snippets — without successfully managing to extract payments from Google, as lawmakers had hoped.
In Spain, for example, which made payments to publishers mandatory, Google instead chose to pull the plug on its Google News service entirely. But publishers who lobbied for a pan-EU reform hoped a wider push could turn the screw on the tech giant.
Nonetheless, Google has continued to talk tough over paying for this type of content.
In a September 2019 blog post the tech giant dug in, writing — without apparent irony — that: “We sell ads, not search results, and every ad on Google is clearly marked. That’s also why we don’t pay publishers when people click on their links in a search result.”
It has also since changed how Google News displays content in France, as Euractiv reported last year — switching to showing headlines and URLs only, editing out the text snippets it shows in most other markets.
However France’s competition authority has slapped down the tactic — taking the view that Google’s unilateral withdrawal of snippets to deny payment is likely to constitute an abuse of a dominant market position, which it writes “seriously and immediately damaged the press sector”.
The company has a dominant position in Europe’s search market — with more than 90% marketshare.
The authority cites Google’s unilateral withdrawal of “longer display article extracts, photographs, infographics and videos within its various services (Google Search, Google News and Discover), unless the publishers give it free authorization” as unfair behavior.
“In practice, the vast majority of press publishers have granted Google licenses for the use and display of their protected content, and this without possible negotiation and without receiving any remuneration from Google. In addition, as part of Google’s new display policy, the licenses which have been granted to it by publishers and press agencies offer it the possibility of taking up more content than before,” it writes in French (which we’ve translated via Google Translate).
“In these conditions, in addition to their referral to the merits, the seizors requested the order of provisional measures aimed at enjoining Google to enter in good faith into negotiations for the remuneration of the resumption of their content.”
Hence issuing an emergency order — which gives Google three months to negotiate “in good faith” with press agencies and publishers to pay for reusing bits of their content.
Abusive practices the agency says it suspects Google of at this stage of its investigation are:
The order requires Google to display news snippets during the negotiation period, in accordance with publishers wishes.
While terms agreed via the negotiation process will apply retrospectively — from the date the law came into force (i.e. last October).
Google is also required to send in monthly reports on how it’s implementing the decision.
“This injunction requires that the negotiations actually result in a proposal for remuneration from Google,” it adds.
We reached out to Google for comment on the Autorité de la Concurrence’s action. In a statement attributed to Richard Gingras, its VP News, the company told us:
Since the European Copyright law came into force in France last year, we have been engaging with publishers to increase our support and investment in news. We will comply with the FCA’s order while we review it and continue those negotiations.
A Google spokeswoman also pointed back to its blog post from last year — to highlight what she described as “the ways we already work with news publishers for context”.
In the blog post the company discusses directing traffic to news sites; providing ad tech used by many publishers; and a funding vehicle via which it says it’s investing $300M “to help news publishers around the world develop new products and business models that fit the different publishing marketplace the Internet has enabled”.
Interim measures are an antitrust tool that Europe’s competition authorities have pulled from the back of the cupboard and started dusting off lately.
Last October EU competition chief Margrethe Vestager used an interim order against chipmaker Broadcom to stop applying exclusivity clauses in agreements with six of its major customers — while an investigation into its practices continues.
The commission EVP, who also heads up the bloc’s digital strategy, has suggested she will seek to make greater use of interim orders as an enforcement tool to keep up with the fast pace of developments in the digital economy, responding to concern that regulators are not able to respond effectively to curtail market abuse in the modern Internet era.
In the case of France’s competition authority’s probe of Google’s treatment of publishers content the authority writes that the interim protective measures it’s ordered will remain in force until it adopts its decision “on the merits”.
The global internet continues to disintegrate into regional internets.
Yesterday, the FCC authorized a Google subsidiary, GU Holdings, to open a submarine fiber optic link between the U.S. and Taiwan, while continuing to block the company’s expansion of the cable to Hong Kong.
The cable, operated by Pacific Light Data Communication, has faced years of delays over its ties to the Chinese mainland. The Trump administration, through the Team Telecom review process, has placed an exacting magnifying glass on the deal structure and its operating processes, arguing that a direct link between Hong Kong and the U.S. would pose grave risks to the security of America’s internet infrastructure.
Team Telecom has been a quiet bureaucratic group within the federal government reviewing internet infrastructure and telecom business licenses as our reporter Mark Harris has described, and the working group only received formal approval for its operations earlier this week in an executive order signed by President Trump.
The original goal of the cable was to connect the U.S. to Taiwan, Hong Kong, and the Philippines, offering Google and other tech companies like Facebook the ability to move large quantities of information from their data centers domestically to the fast-growing Asia-Pacific region. That sort of bandwidth is even more acutely needed today in the context of the global pandemic of novel coronavirus and the rapid increase in work-from-home activities that are driving record internet usage.
Yet, when Dr Peng Telecom & Media Group bought a stake in the cable’s operating company in late 2017, concerns intensified among DC national security professionals that the cable could come under the sway of Beijing’s influence.
Those delays have proven costly for GU Holdings, which has argued in filings with the FCC that the project was increasingly non-viable given the extensive review process.
With today’s announcement, Google’s subsidiary has agreed to an extensive set of national security constraints on the project, including a moratorium on expansion to Hong Kong, extensive disclosure of the network’s operating processes to the U.S. federal government, and using security-cleared personnel in operating the cable.
In the government’s filing, the Team Telecom agencies, which include Justice, Homeland Security, and Defense, said that they “believe that in the current national security environment, there is a significant risk that the grant of a direct cable connection between the United States and Hong Kong would seriously jeopardize the national security and law enforcement interests of the United States.”
As part of the national security agreement, “Google will pursue diversification of interconnection points in Asia, including but not limited to Indonesia, Philippines, Thailand, and Vietnam. This diversification will include pursuing the establishment of network facilities that allow delivery of traffic on Google’s network as close as practicable to the traffic’s ultimate destination.” In other words, internet traffic will not be relayed through China or Hong Kong, which is a special administrative region of China.
The agreement will ultimately allow Google and other large tech companies to advance their interests in this important region, but it does underscore the increasing disintegration of the vision of one, global internet. Data sovereignty rules in Europe, India, China, and Russia are forcing tech companies to offer specialized cloud services tailored to each region’s privacy and censorship interests rather than offering one open and free infrastructure for global internet users.
According to GU Holdings’ filing, the U.S.-Taiwan segment of the cable is operationally ready, and will presumably start handling traffic in relatively short order.