Estonia has withdrawn permits from one thousand crypto companies this year.
New partnerships, network upgrades, and a surge in DeFi activity sent Zilliqa price on a strong month-long rally.
This year’s Form 1040 requires all U.S. taxpayers to answer a question about whether they traded or acquired “virtual currency” during the year.
No one likes having to go the automotive repair shop. There’s little transparency into what happens after a car is dropped off, invoices are often little more than a series of illegible bullet points, and the experience often feels chaotic.
AutoLeap, a six-month-old, Toronto-based startup that quietly raised $5 million in seed funding in September, thinks its team can figure out how to repair that broken experience by bringing car repair shops into the 21st century at long last. Its big idea is to help such shops organize their operations, schedule jobs, order parts, conduct digital inspections so that they can show clients what their cars require and why, and to be able to invoice customers in a transparent and seamless way.
It’s not the first to try to modernize the car repair process. A five-year-old, Seattle-based startup, Wrench, has already raised $40 million toward that end, while another entrant, RepairSmith, a two-year-old, L.A.-based car repair and maintenance service, is backed by Daimler.
Still, with a global automotive repair market that’s currently valued at $700 billion, there’s clearly room for more than one player and one approach, and AutoLeap has a few things working for it.
For starters, it has an investor base with some useful connections. Threshold Ventures, which led AutoLeap’s seed round, has ties to the automotive world, including through its bet on the car-selling platform Shift, which went public in October via a reverse merger.
AutoLeap — whose other venture investors include Maple VC, Liquid2 Ventures, Global Founders Capital, and Codename Ventures — is also backed by some notable individuals that hold sway in the world that AutoLeap is entering. Among them: Shift cofounder George Arison, former General Motors CEO Rick Wagoner, and former senior Bridgestone exec Ned Aguilar.
More importantly, AutoLeap’s founders worked together once before to reinvigorate a stodgy business. Before launching AutoLeap, co-CEOs Rameez Ansari and Steve Lau spent four years as the co-CEOs of FieldEdge, a SaaS company that helps contractors to run their small businesses.
They two — college friends who’d met at the University of Toronto — didn’t start the company. Rather, after Lau nabbed an MBA from Wharton for Ansari nabbed one from Stanford, they joined forces to acquire, manage and grow a neglected business after raising a a so-called search fund, a vehicle that’s backed by individual investors willing to bet that a team will find a company to buy, run it for some period of time, then sell it for far more money.
It was a productive experience for all involved. After spending $20 million to acquire FieldEdge, whose software had already been around for 30 years, Lau and Ansari so dramatically improved the company’s offerings that they were able to charge seven times what the company had previously charged for its products, says Lau. Then they sold it to the private equity firm Advent in 2018 for “north of $100 million,” says Lau.
It was a solid exit. Minus that $20 million investment, the team kept 30 percent of the remaining proceeds from FieldEdge’s sale, with the rest going to the search fund’s investors.
Even so, says Lau, he and Ansari might have kept going if not for rival ServiceTitan, which “went crazy on the fundraising front.” (The seven-year-old company has raised $400 million altogether from investors.) Between ServiceTitan’s daunting war chest and “given this was a first exit for us,” Lau says, “we transitioned out instead.”
Today, neither Lau nor Ansari wants to repeat the scenario with AutoLeap. Indeed, though Lau says the company is “heads down” and “not in any discussions” with investors now that it has secured seed funding, one imagines it won’t take long for AutoLeap to enter into discussions about that next round.
What investors would be funding essentially is a burgeoning software platform that aims to kill off paper flyers, crumbling fax machines, and sheaves of invoices — if only it can convince car repair shops to slow down long enough to try its software.
It isn’t a no-brainer that they will, admits Lau. “It’s a material onboarding effort, because you become the lifeblood of their business.” The sales process also requires convincing the shops to share their existing data and take the time required to be trained on how to use it.
Lau isn’t dissuaded, plainly. He says the time to onboard a new customer is one to two weeks and that “once they start seeing value, they get that ‘aha’ type of moment.” In fact, he says that AutoLeap is already working with a handful of shops, including several in Toronto, one in Las Vegas, and another in Boston.
As for its expansion plans, Lau says that some of the company’s seed funding will go toward digital marketing but that it’s also relying heavily on word of mouth. It helps, he says, that garages are often clustered in any one geographic area, which he believes will enable AutoLeap to spread quickly.
There isn’t “a lot of data” to support that assumption, offers Lau. But if AutoLeap has its way, there will be soon enough.
Above, left to right: AutoLeap co-CEOs Rameez Ansari and Steve Lau in a photo that Lau readily volunteers was Photoshopped owing to the pandemic.
China’s embattled coffee delivery startup Luckin has reached a settlement with the U.S. Securities and Exchange Commission, agreeing to pay a $180 million penalty to settle charges that it overstated its revenues, expenses, and losses by the hundreds of millions of dollars.
The announcement by the market regulator arrived Wednesday evening, months after short-seller Muddy Waters first reported the alleged fraud early this year. In response to the allegations, Luckin said in April it would launch an internal probe. In June, the SEC said it would delist Luckin, and in July, Luckin admitted it did cook its books.
The fiasco came only a year after Luckin raised $651 million through its first time sale on Nasdaq. The company was founded in October 2017, making it one of the fastest companies to go from a startup to a public company.
The startup, which aspired to take a piece of Starbucks’ sizable market share in China, allegedly fabricated more than $300 million in sales between at least April 2019 through January 2020, said the SEC announcement. Certain employees were found attempting to conceal the fraud by inflating the firm’s expenses by more than $190 million, “creating a fake operations database, and altering accounting and bank records to reflect the false sales.”
Luckin neither admitted or denied these claims, which were filed in a court in the Southern District of New York. The settlement is subject to court approval and the transfer of funds to security holders will need approval by Chinese authorities.
In September, China’s market regulator fined Luckin and 45 companies involved in Luckin’s frauds a total of $9 million after an investigation revealed the coffee company faked its numbers.
Despite the fraudulent scandal, Luckin claims business is still as usual. Operations of the firm and its stores are currently “stable and normal,” said the company in a notice on Wednesday.
“Luckin will continue to cooperate with regulators and prioritize compliance. In the meantime, our management and staff will continue to ensure the firm’s stable operation.”
Short-sellers have been going after U.S.-listed Chinese firms this year. A report from Wolfpack Research accused iQiyi, a major Chinese video streaming service backed by Baidu, of inflating its numbers, a claim that triggered an SEC probe. GSX Techedu, a Chinese after-school tutoring company, was under a similar SEC investigation after short-seller Citron Research said the company fabricated sales numbers.
“While there are challenges in our ability to effectively hold foreign issuers and their officers and directors accountable to the same extent as U.S. issuers and persons, we will continue to use all our available resources to protect investors when foreign issuers violate the federal securities laws,” said Stephanie Avakian, director of the SEC’s division of enforcement, in the regulator’s announcement on Luckin.
French fintech startup Lydia has extended its Series B round. Accel is leading the extension with all major existing shareholders also participating. Lydia first raised $45 million in January 2020 — Tencent led that investment. The startup is now raising another $86 million, which means that Lydia has raised $131 million in total as part of its Series B round.
While Lydia wouldn’t discuss the valuation of the round, its co-founder and CEO gave me a hint. “The value of the company has really significantly increased between the two parts of the B round,” he told me.
Interestingly, Amit Jhawar is heading this investment for Accel . He joined Accel as a venture partner in July and he’s going to join Lydia’s board of directors.
Jhawar joined payments company Braintree in 2011 as COO and CFO. Shortly after, Braintree acquired peer-to-peer payment app Venmo. “When we acquired Venmo it was only 15 people. They had just released their mobile app in April of 2012,” Jhawar told me in a phone interview.
PayPal later acquired Braintree and Venmo — Jhawar stuck around until early 2020 to scale Venmo to the huge fintech consumer app that 52 million people use in the U.S. Jhawar believes that peer-to-peer payments represent the beginning of a long-term consumer relationship.
“You know that P2P is successful when they leave money in their account because they’re going to come back,” he said.
Back in 2014, when I first covered Lydia, I called it the Venmo for France — they had only raised €600,000 back then. It seems like Jhawar agrees with that take. Since then, Lydia has grown quite a lot and has expanded beyond peer-to-peer payments in various ways.
With Lydia, you can send money to another user in just a few seconds. You don’t have to enter an account number in your banking app — as long as you know their phone number, they’ll receive your payment.
If you have money in your account, you can choose to spend it directly using a Visa debit card. Lydia lets you generate a virtual card that works with Apple Pay and Google Pay — you can also order a plastic card.
Lydia also supports direct deposit as you get your own IBAN in the app. You can also create money pots and send a link to other users, view your bank accounts in Lydia, donate money to hospitals and charities, get a credit line, etc.
But there’s one killer feature that stands out over the rest. Bank accounts tend to be monolithic and don’t reflect how you use money. “If you look at banks today, they call the main account a checking account. It’s outdated by design,” CEO Cyril Chiche said.
Lydia has created flexible sub-accounts that you can use in many different ways. You can create a second sub-account and set some money aside for your bills. You can create a third one and share it with a few friends because you’re going on a vacation together.
You can move money from one account to another by swiping your finger across the account grid. As you can have multiple contributors and you can change the account associated with your debit card, it means that money flows more naturally. It feels like using a messaging app, not a financial app.
And it’s been working well in France. The company now has more than 4 million users. Transactions have doubled over the past year, which means that usage is accelerating.
“Lydia has the largest P2P network in Europe outside of PayPal and has the potential to grow all across Europe with a mobile-first, customer-focused solution. This will bring demand for incremental consumer financial products and high merchant interest to accept the payment,” Jhawar told me in an email.
And 2020 has been a busy year for Lydia. The company has just released a complete redesign to better position the app as a super app for financial services. All the interactions and all the main tabs have been changed.
Lydia also re-launched its premium offering with two new premium plans that offer you higher limits over the free plan and an insurance package for the most expensive offer. Those plans are more in line with what the app offers today and should contribute to the company’s bottom line. “The next step is bringing Lydia to profitability and it’s something that has always been important for us,” Chiche said in a recent interview.
Behind the scenes, Lydia has also upgraded many core features, such as migrating cards to a new infrastructure, adding alerts to account aggregation, supporting instant SEPA transfers to bank accounts, etc.
In 2021, the company plans to build on top of that new foundation with more financial products. “We’re going to try every single product — credit, savings, investment,” Chiche said.
The company is also slowly expanding to more countries. But it wants to offer a product that feels like a local product with a local card and a local IBAN to increase acceptance rates. Lydia is starting with Portugal.
Facebook takes aim at Apple, Texas sues Google and we interview the CEO of Boston Dynamics. This is your Daily Crunch for December 16, 2020.
The big story: Facebook escalates Apple criticism
Facebook took a big swing at Apple’s upcoming app tracking restrictions today with full-page ads in the print editions of The New York Times, The Wall Street Journal and The Washington Post that argued the social networking giant is “standing up to Apple for small businesses everywhere.”
In other words, while Facebook will obviously be affected by Apple’s change (apps will have to ask users for permission before it can track their IDFA identifier, which will presumably lead to a steep drop in ad targeting), the company said that small businesses relying on targeted ad campaigns will be hurt even more.
And while the two campaigns are very different, it’s worth noting that another initiative against Apple is also gaining steam, with major U.S. news publishers joining the Coalition for App Fairness, a group fighting app store fees.
The tech giants
The latest multistate antitrust lawsuit targets Google’s ad business — Texas Attorney General Ken Paxton is accusing Google of maintaining an illegal monopoly in online advertising.
Following Hyundai acquisition, Boston Dynamics’ CEO discusses the robotics pioneer’s future — Rob Playter discusses the company’s new corporate parent, the future of Handle and Spot’s job at the NYPD.
Amazon’s Project Kuiper will seek multiple launch providers to carry its satellites to space — Amazon’s David Limp shared some new details about the company’s Project Kuiper broadband satellite constellation.
Startups, funding and venture capital
StockX raises $275M Series E, valuing the retailer at $2.8B — Headquartered in downtown Detroit, Michigan, the raise marks the largest VC funding round in Michigan history.
BigID keeps rolling with $70M Series D on $1B valuation — Salesforce Ventures and Tiger Global co-led the round.
New Wave is a new European seed fund headed up by ex-Accel VC Pia d’Iribarne — The firm’s debut fund of $56 million was raised in just three months.
Advice and analysis from Extra Crunch
How to pick an investor in good or bad times — Quiq CEO Mike Myer says you should trust your instincts.
ClickUp CEO talks hiring, raising and scaling in the white-hot productivity space — The company, which makes business productivity tools for task management, goals and docs, has reached a valuation of $1 billion.
Dear Sophie: How did immigration change for startup founders in 2020? — Another edition of immigration lawyer Sophie Alcorn’s advice column answering immigration-related questions about working at technology companies.
(Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)
Everything else
Bitcoin passes $20K and reaches all-time high — Bitcoin’s value has rapidly increased over the past two months.
Privacy is the new competitive battleground — New regulations give companies new opportunities to differentiate themselves.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.
It took an unusually long time, but HBO Max is set to launch on Roku devices tomorrow.
Roku users make up a massive chunk of the cord-cutting market, so the absence of an HBO Max app for Roku nearly seven months after the service launched was pretty glaring. We’d been wondering where the Max app was for months, its launch seemingly tied up over the matter of where and how customers could subscribe.
With “Wonder Woman 1984” set to debut on Max in just a few weeks, one can assume there was tremendous pressure all around to get the deal done. As part of the deal, Roku users will be able to sign up for HBO Max using Roku’s built-in payment system, Roku Pay.
This news comes about a month after HBO Max filled a similar gap by finally launching on Amazon Fire devices, and days after the announcement of a mega deal that will see all 2021 Warner Bros. films launch on HBO Max on the same day they hit theaters.
With this launch, HBO Max will have most of the key bases covered, with support on iOS, Android, Chromecast, Roku, Amazon’s Fire devices, PC/Mac and all of the modern gaming consoles minus the Switch.
So what happened?
Texas and nine other Republican-led states have filed an antitrust lawsuit against Google, alleging that the company has monopolized digital advertising—including through anti-competitive agreements with Facebook.
Google, the suit alleges, not only connects ad buyers and sellers, it operates the exchange and manipulates the rules and algorithms to favor its own results. This makes Google “the pitcher, catcher, batter and umpire, all at the same time,” the Texas attorney general claimed in his announcement.
How does the lawsuit claim Google and Facebook conspired?
The lawsuit describes backroom agreements between Google and Facebook, codenamed after Star Wars characters, to manipulate ad auctions in a way that would benefit the two rivals. (The code name itself was redacted, though the Wall Street Journal has since revealed it as “Jedi Blue”.)
“Any collaboration between two competitors of such magnitude should have set off the loudest alarm bells in terms of antitrust compliance,” the lawsuit states. “Apparently, it did not.”
As well as allegedly conspiring with Facebook, the attorneys general claim that Google also manipulated smaller, less threatening publishers, and deceived them about auctions to ensure its dominance.
Is is true that Google can read my WhatsApp messages?
A lot of attention has been focused on a heavily redacted section of the lawsuit, in which the states allege an exclusive agreement between Google and Facebook, signed shortly after Facebook’s WhatsApp acquisition, “granting Google access to millions of Americans’ end-to-end encrypted WhatsApp messages, photos, videos, and audio files.”
Because of redactions it is unclear what evidence there is for this claim, although it may refer to a WhatsApp-Google Drive integration that allowed WhatsApp users to more easily back up their accounts to Drive. The allegaation was made as part of Texas’s argument that Google only cared about user privacy when it was convenient and good publicity for the search giant.
Wasn’t there another lawsuit against Google recently?
The Texas lawsuit follows on an October complaint by the Department of Justice and 11 Republican states, including Texas. It also precedes an expected complaint by Colorado and Nevada, which could be filed as soon as Thursday.
These are the result of a joint investigation on Google launched in September 2019 involving 48 states, as well as Washington DC and Puerto Rico.
It’s a “divide and conquer strategy,” says Sally Hubbard, the director of enforcement strategy at the Open Markets Institute, an organization that advocates against corporate monopolies, “with different enforcers focusing on different aspects of Google’s monopolization due to resource constraints.”
The DoJ’s complaint was more narrowly focused on Google’s agreements with mobile device creators and browsers to make its search engine the default, while Thursday’s complaint is expected to focus on how Google changed its design to give it an advantage over more specialized search engines, like Yelp, as Politico reported earlier this week.
Google’s search practices have drawn complaints from competitors and the occasional attention of regulators for years, since its 2008 purchase of adtech company DoubleClick led to its “fundamental shift” as a middleman—and eventual monopolist, the suit alleges— for online advertising.
Attention, however, has not always led to legal action.
This has shifted considerably as lawmakers on both sides of the aisle, as well as consumer advocacy organizations, have increasingly criticized big tech’s outsized influence on American life.
What happens next?
The flurry of lawsuits—including more that target other aspects of Google’s business— may eventually be consolidated with the DoJ complaints.
For its part, Google denies wrongdoing and called Texas’ claims “meritless.”
“We’ve invested in state-of-the-art ad tech services that help businesses and benefit consumers,” a Google spokesperson said in a statement. “We will strongly defend ourselves from his baseless claims in court.”
It will be quite the fight. Texas says it is seeking to “restore free and fair competition to the markets” as well as “structural, behavioral, and monetary relief”—in other words, a break-up of the search giant.
China’s Chang’e 5 mission successfully delivered samples of lunar rock and dust to Earth on December 17. It marks the first time in 44 years that moon rocks have been brought back to our planet, since the Soviet Union’s Luna 24 mission in 1976. It’s also the first time China has ever pulled off a sample return mission.
How it happened: The sample capsule landed in Inner Mongolia at a little after 2:00 a.m. Thursday local time. Recovery teams in trucks and helicopters located the landing site shortly after and secured the sample container.
The drop-off is the culmination of a 23-day mission that began on November 23, when China launched Chang’e 5 from a site on Hainan Island. The mission’s lander touched down on the moon eight days later and immediately began drilling. It collected lunar material from below the ground as well as from the surface. The goal was to collect at least four pounds and bring it back to Earth.
The samples were stored on an ascent vehicle that brought them back to an orbiter on December 6. The mission headed back to Earth on December 13, and now we finally have new moon rocks to study.
New science awaits: While Apollo-era moon rocks are estimated to be about 3 to 4 billion years old, the material collected by Chang’e 5 is from a site in the northwest region of the moon’s near side called Mons Rükmer. This area was formed more recently, and the rocks here are thought to be only about 1.2 billion years old. That means scientists studying the material could learn more about the evolution of the moon and test out new techniques for estimating the age of geological samples from other planets, moons, and asteroids.
China’s big day: The Chang’e lunar program, which includes two deployments of lunar rovers to the moon’s surface, has been remarkably successful. Although Chang’e 5 was a short mission, it’s one of the most complicated projects undertaken by the Chinese space program so far. The country is far from done with the moon—Chang’e 6, a second lunar sample return, is slated to launch in 2023 or 2024.