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Traditional roadmaps for startups center around this idea of the exit. Oftentimes, the ideal exit in the minds of startups and venture capitalists goes one of two ways: IPO or acquisition by another company.

But there are other ways for startups to exit that could potentially bring more value to a larger variety of stakeholders. Exit to Community (E2C), a collaborative working project led by the University of Colorado Boulder’s Media Enterprise Design Lab and Zebras Unite, explores ways to help startups transition investor-owned to community ownership, which could include users, customers, workers or some combination of all stakeholders. Today, the group released a digital and physical zine designed to serve as an introduction to Exit to Community.

“The purpose of the zine is to provide an initial roadmap to all of the aspects of the conversation that need to happen so we can save founders pain in recognizing and validating they’re in the wrong fit and we need to co-create what does fit,” Zebras Unite co-founder and zine co-author Mara Zepeda told TechCrunch. “It’s not a silver bullet. It’s not like there’s this other perfect thing that everyone needs to do. I describe it as running a Cambrian explosion of experiments in order to figure out what this future is. It’s not just one thing. That’s how what we’re doing is really different. Sometimes there are these niche products or movements that pop up and say, “this is the answer. There isn’t one answer for this moment.” 

These alternative exit models also have the potential to to open the door for founders in other markets, E2C co-organizer Nathan Schneider told TechCrunch. He pointed to tiphub, a company focused on Africa and the African Diaspora, that had been looking for alternative ways to support founders given there isn’t a huge mergers and acquisitions market in Africa.

“Because of the infrastructure that exists in the financial market, we don’t have the same set of realities that a very active VC industry does in Europe or the U.S.,” tiphub Partner Chika Umeadi told TechCrunch. “There’s just not as much private equity activity or M&A activity. We believe we have a strong hypothesis for how we can manufacture companies quickly, but we still need to build the other side of the market. There are companies that are valuable, but we now have to think about alternative methods of exiting.”

Already, there are a handful of examples out there of what exiting to community can look like. Buffer, a social media management platform, bought out its investors in 2018 because it became “clear that Buffer had become less of a fit for VC funding,” Buffer CEO and co-founder Joel Gascoigne wrote in a blog post at the time.

Then, in 2019, SEO and Conductor bought back its content marketing company from WeWork. Now, the company is majority employee-owned.

“It was a dream that we always had that we would own the company and we gave a huge amount of ownership to all the people and now the company is almost entirely employee-owned,” Conductor CEO Seth Besmertnik told me earlier this year. “And now we have everything we want to go and make our mission a reality.”

Outside of the tech industry, E2C points to Organically Grown Company, an organic produce distributor based in Oregon that transitioned from an employee- and grocer-owned operation into a community-owned one.

“These types of glimpses suggest that it’s possible,”Schneider said.

For investors, while IPOs and acquisitions can elicit high returns, not all of the startups in their portfolios will be candidates.

“Their current exit options limit what kind of returns and outcomes they can see for their portfolio companies,” Schneider said. “If a startup ends up not being a candidate for an IPO or acquisition, E2C can still help them get their money back, or get a decent return. There’s also a class of investors trying to thread the needle of financial return with social return, and are looking for models that can help facilitate that.”

Beyond the zine, the next step is to crate a peer learning cohort of founders who are exploring some of these options. Down the road, the hope is to create standard documents for startups that make it easy for founders to pursue these alternative paths.

RealPage, a publicly traded full-service property management technology firm with over 12,200 clients worldwide, today announced that it has acquired Stratis IoT,  a startup that provides IoT services to the real estate industry, with a focus on access and energy management tools.

“RealPage aims to become a leading provider in the burgeoning rental property automation market, and thereby create significant opportunity for operators to increase rents, improve sustainability, add operational efficiencies, reduce operating costs and enhance the customer experience for the company’s approximately 19 million units throughout the United States,” said RealPage CEO Steve Winn. “The smart building technology also provides a launching pad for expanded international operations, thanks to Stratis’ existing international presence.”

Stratis is currently installed in about 380,000 homes in the U.S., Japan, UK and several countries in Europe and Latin America. Both Stratis and RealPage target a wide range of the real estate industry, ranging from multifamily units to student housing, vacation homes and commercial real estate.

Image Credits: Stratis

Traditionally, the real estate market wasn’t always the first to adopt modern technologies. That’s quickly changing now, though, in part because of the promise of IoT, which isn’t just a boon to renters looking for modern solutions in their apartments but also represents the possibility of significant cost savings for the industry. RealPage argues that smart technology can generate a revenue lift of $55 per unit, for example, and that’s the kind of saving (and higher revenues) that will push even legacy B2B platforms to modernize.

One area where Stratis stands out is its ability to integrate with a wide variety of third-party solutions.

“Holistic building-wide access and utility management and control are integral to building optimization and the resident experience, which have become increasingly intertwined,” said Stratis IoT CEO Felicite Moorman. “RealPage and Stratis IoT combine two industry-leading, best-in-class platforms to create a powerhouse of control and single-app resident experience for multifamily, student housing, and beyond.”

The two companies did not disclose the price of the acquisition. It’s worth noting that RealPage isn’t a stranger to making acquisitions to bring its technology up to speed. A year ago, the company acquired Hipercept, for example, a firm that provided data services and data analytics to the institutional real estate market. Then, in December, it also acquired Buildium, a SaaS property management solution with over 2 million units under management. In 2019, the company said planned to spend just over $100 million on acquisitions.

Earlier this year, online marketplace OfferUp raised $120 million and acquired a top competitor, letgo as a part of the fundraise led by letgo’s majority investor, OLX Group. As a part of the deal, OfferUp said it planned to eventually combine the businesses’ respective marketplaces into one but didn’t get into specifics of how that merger would take place. Today, OfferUp says it has now combined the OfferUp and letgo marketplaces into a new app and explained how the transition will work for former letgo users.

The newly combined OfferUp and letgo application is available across both iOS and Android, and expands the number of deals, buyers and seller, by naturing of its combined communities. With the expansion and merger, users on the new marketplace will also gain access to features like nationwide shipping and OfferUp’s safety programs like TruYou and Community MeetUp Spots. In addition, the listings on the app will never expire, though letgo had expired them after 30 days.

Existing letgo users will be directed to download the new OfferUp & letgo app, then use their letgo sign-in information to create their new OfferUp account. When they sign in, their account’s reputation, including their ratings, sales and purchase history, and join date will transfer from letgo to OfferUp.

However, items users had listed on letgo will not move over to OfferUp. Instead, they’ll need to be reposted. For customers who were in the middle of transactions, the company is offering a website legacy.letgo.com where those transactions can be completed. This site will be shut down after September 21, so it’s being advised that all parties quickly complete their sales.

As a result of the merger, customers with an active subscription to Super Boost Mode on letgo will have that subscription automatically cancelled. They can choose to use OfferUp’s Promote Plus service instead, but won’t be automatically signed up or opted in.

There will be some other differences between the two marketplaces that letgo users should understand. While the merger does bring nationwide shipping to former letgo users, it also means that some of letgo’s categories are no longer supported. These include jobs, services, rental listings and gift cards.

In addition, letgo won’t be supported in Canada due to the merger and OfferUp hasn’t yet reached Canada either. That means the company will lose some number of Canadian users as a part of the deal.

At the time of the deal, letgo brought to the table an app that had over 100 million worldwide downloads, so there is potential for at least some portion of its lapsed users to reactive their accounts upon their next launch. The two apps had also been neck-and-neck in terms of their App Store category rankings before the acquisition, though the iPhone version of OfferUp had a slight lead.

As of yesterday, OfferUp was still ahead with a ranking of No. 4 in iPhone’s Shopping category, compared with letgo at No. 12, per data from Sensor Tower.

As a business model, SaaS has expanded to epic size. A number of major SaaS companies filed to go public last week, and there are now thousands of SaaS startups growing all around the world. That scale makes it easier for banks and financial institutions to offer tailored solutions to this market around everything from equity to debt.

We’ve talked a bit about SaaS securitization the last few weeks, a crop of new financial products that use the metrics of a SaaS company to underwrite its debt (e.g. better churn = more debt available and at better terms) as opposed to traditional benchmarks like total revenue and company age. We also did a deep dive with Kentik CEO Avi Freedman on how he approached his recent venture debt fundraise and the terms he got across his five term sheets.

Every SaaS company these days is considering its financial options and the tradeoffs between equity and debt. But sometimes, they just need cash, and cash as quickly as possible. Startups sign contracts with customers that might be paid over a year or more, but they want to access that cash now, and at the best terms possible. The product that solves this problem is known as an accounts receivable line, and you can go to many banks to get them, with all the drudgery of that process.

Or, four founders hope, you’ll head to Capchase.

Capchase is an online platform for rapidly getting cash from your accounts receivable. Startups upload key details of their customer contracts and financial history to Capchase, and the company uses its underwriting algorithms to quickly assess the quality of those contracts and extend a debt line. The startup calls itself part of the “non-dilutive revolution,” and it’s headquartered in Boston.

“We’re targeting B2B SaaS or ‘X-as-a-service’ companies with recurring revenue, and we’re targeting companies around the seed to Series B/C stage having more than $1 million of ARR and at least eight months of revenue generating history,” Miguel Fernández, CEO and co-founder, said.

He linked up with three other founders earlier this year to launch Capchase: Luis Basagoiti, Ignacio Moreno, and Przemek Gotfryd. Fernández and Gotfryd met while at Harvard Business School where Fernández was thinking about “working capital and cash conversion cycle optimization” after his previous experiences at SaaS companies. Gotfryd had previously worked at growth investor TCV in London, where he acutely saw the challenges of raising non-dilutive cash.

Capchase’s team. Photo via Capchase.

Despite its early operational history, the company has already raised its own cash quickly. It closed on $4.6 million in VC seed funding led by Caffeinated Capital, Bling Capital, and SciFi VC, along with a number of angels.

To get cash early today, startups often resort to negotiating terms with their customers, offering discounts — sometimes massive discounts — for them to pay an entire contract’s value upfront. Fernández saw an opportunity to arbitrage the difference between interest rates and those discounts with Capchase.

From a user’s perspective, after syncing their startup’s financial data to Capchase, they will see a projection of what their runway extension will look like after selecting a debt line, and then Capchase will extend its terms after going through an underwriting process (“which takes a couple hours now, and is very rapidly decreasing to take minutes” Fernández said). In terms of traction, he said that “we’re working with around 3-4 customers right now.”

Startups are charged a discount on their total contract value, which is where Capchase makes its money. For instance, if $100,000 is going to be paid by a customer over the next twelve months, Capchase may offer $95,000 to the startup upfront, and keep the remaining $5,000 as those payments roll in. That discount fluctuates based on the startup in question and the payment risk of the underlying customer contracts.

Fernández said that venture debt is often cheaper on a pure interest rate basis, but that once additional elements of those products are added in such as warrants, the simplicity of Capchase’s product will prove competitive for founders.

Simpler, easier, and fully digital financial products are always welcome, and Capchase hopes that it will nestle itself in a suite of new financial products for SaaS founders looking to avoid dilution and extend their cash longer.

TC Sessions: Mobility 2020 kicks off in 37 days, but the countdown clock on early-bird pricing runs out in just five. Engage with the mobility community’s brightest minds, makers, visionaries and investors from around the globe on October 6-7. Buy your early-bird pass before the bird expires September 4 at 11:59 p.m. (PDT), and you’ll save $100 over full price.

Why attend TC Sessions: Mobility 2020? It offers beaucoup benefits, but let’s start here. Whether you’re launching a mobility startup or you’re an established player, you’ll gain valuable insight to help position and grow your business.

“I learned a lot from the breakout sessions. An official from the Los Angeles DOT spoke about the city’s plan to build pathways for micro mobility vehicles. Access to experts sharing that kind of information is essential for anyone launching a micro mobility startup. — Parug Demircioglu, CEO at Invemo and partner at Nito Bikes.”

“As a mobility company, we need to stay on the cutting edge of what’s happening in the space and know what others are doing. TC Sessions: Mobility helps us tap into the latest trends, like which cities are open to new services, which ones are having a harder time and what’s going on with MDS — probably the hottest topic at this point.” — Melika Jahangiri, vice president at Wunder Mobility.

Now that you’ve heard directly from your peers, let’s talk about what’s on the mobility menu. A kickass agenda for starters. Let’s take a peek.

• Setting the Record Straight — Argo AI has gone from unknown startup to a company providing autonomous vehicle technology to Ford and VW — not to mention billions in investment from the two global automakers. Co-founder and CEO Bryan Salesky will talk about the company’s journey, what’s next and what it really takes to commercialize autonomous vehicle technology.
• The Future of Trucking — TuSimple co-founder and CTO Xiaodi Hou and Boris Sofman, former Anki Robotics founder and CEO who now leads Waymo’s trucking unit, will discuss the business and the technical challenges of autonomous trucking.

You’ll hear interviews with top founders, technologists and investors. You’ll also hear from big players, like Lyft and Uber, and household giants like Porsche and Audi who can see the mobile writing on the wall. But we also have plenty of room for newbies and upstarts. In fact, we’ve added a pitch-off to this year’s lineup. We’ll announce more details on how early-stage mobility startup founders can apply to compete, so stay tuned.

Don’t miss out on the mobility event of the year — or miss out on serious savings. You have just five days left to beat the clock and save $100. Buy your pass to TC Sessions: Mobility 2020 before September 4 at 11:59 p.m. (PDT). Don’t let the early bird flip you the worm.

Is your company interested in sponsoring or exhibiting at TC Sessions: Mobility 2020? Contact our sponsorship sales team by filling out this form.

In last week’s IPO wave, one company fell a bit by the wayside amongst filings from better-known companies like Asana and Palantir. JFrog, a company that TechCrunch reported helps allows developers and companies deliver application updates “in the background without disturbing the user experience” when it raised $165 million in 2018, is positioned for an exciting debut.

Why? The unicorn — the same 2018 round valued JFrog at around $1.2 billion according to PitchBook data — has a unique blend of growth, margins and profitability that should make its pricing cycle incredibly interesting.

The Exchange explores startups, markets and money. You can read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

JFrog will give us an insight into how Wall Street will value a fast-growing, managed software company that also doesn’t lose money. It’s not something we see often, and other market hopefuls like the aforementioned Asana and Palantir are far from similar levels of profitability.

Let’s take a quick look at what JFrog would be worth if it were a more normal — read: less profitable — SaaS company, and then ask what it might be worth as a cash-generating, recently profitable concern. The numbers are pretty surprising.

JFrog

If you want more on the basics of JFrog’s business and why developers and companies care about the company, head here. We’re only doing numbers today.

Back to the basics as a refresher from early last week, here’s what you need to know about JFrog’s business:

• Revenue grew from $63.5 million in 2018 to $104.7 million in 2019 and from $46.1 million to $69.2 million from the first half of 2019 to the first half of 2020. Those gains of 65% and 60.1%, respectively, put JFrog on a comfortable growth pace for a company doing nine-figure revenues.
• JFrog has lost less money as it has grown. From $1.00 per share in 2018 to $0.20 per share in 2019, and from $0.08 per-share in the first half of 2019 to just $0.02 per share in the first half of 2020.
• JFrog’s gross margins have been 81% or better in every mutliquarter period we have record of.
• JFrog’s operating cash flow has improved over time as well, rising from +$8.6 million in 2018 to $10 million in 2019, and from +$0.415 million in the first half of 2019 to +$5.9 million in the first half of 2020.
• And, after some quarters of extremely limited losses, JFrog posted its first known (since Q1 2018) GAAP profitable quarter in Q2 2020, generating $1.7 million in net income off of revenues of $36.4 million in the same period.

Now ask yourself, what is that company worth?

Amazon has been granted an approval by the U.S. Federal Aviation Administration (FAA) that will allow it to start trialling commercial deliveries via drone, Bloomberg reports. This certification is the same one granted to UPS and a handful of other companies, and while it doesn’t mean that Amazon can immediately start operating a consumer drone delivery service for everyone, it does allow them to make progress towards that goal.

Amazon has said it’ll kick off its own delivery tests, though it hasn’t shared any details on when and where exactly those will begin. The FAA clearance for these trials is adapted from the safety rules and regulations it imposes for companies operating a commercial airline service, with special exceptions allowing for companies to bypass the requirements that specifically deal with onboard crew and staff working the aircraft, since the drones don’t have any.

These guidelines are at best a patchwork solution designed by the agency and its commercial partners to help provide a way for them to get underway with crucial systems development and safety testing and design, but the FAA is working towards a more fit-for-purpose set of regulations to govern drone airline operation for later this year. That will mostly be related to authorizing flights over crowds – but any drone flights will still require constant human observation.

Ultimately, any actual viable and practical system of drone delivery will require fully autonomous operation, without direct line-of-sight observation. Amazon has plans for its MK27 drones, which have a maximum 5 lb carrying capacity, to do just that, but it’ll still likely be many years before the regulatory and air traffic control infrastructure is updated to the point where that can happen regularly.

Tired of signing up for email newsletters? Then maybe it’s time to try out The New Paper‘s news digest, which arrives in the form of a daily text message rounding up the biggest headlines.

The Indianapolis-based startup is announcing that it’s leaving private beta testing. It raised $300,000 in pre-seed funding last year, including $80,000 from a pitch competition held by Elevate Ventures (the VC fund based by Indiana State).

Founders Michael Aft and John Necef told me that they started The New Paper with the intention of creating  email newsletters at first (something Necef has experience with, having served as head of growth at The Hustle), but they decided that text messages offered the best way to, in Aft’s words, “do daily news right.”

“Think about the volume of email you get everyday,” he continued. “It’s this stressful, noisy, environment where you get spam and e-commerce messages. Text is easy, it’s clean, it’s extremely convenient, it’s intimate.”

In fact, Necef said that “a common anecdote” they’ve heard from early subscribers is the fact that they sign up for email newsletters “with the best of intentions” but then those newsletters end up sitting unread in their inboxes. (Think of it as the digital equivalent of those piles of unread New Yorkers.)

Of course, the fact that text messaging is such a personal channel also means that readers aren’t likely to stick around unless they’re actually getting what they want. But Aft said he embraces the challenge of meeting that higher bar: “You’re never going to forget that you subscribed.”

Image Credits: The New Paper

In fact, The New Paper needs to provide value not just because it’s delivered via text message, but because it’s a paid product — after a weeklong free trial, it costs $5 per month. And more than 7,000 paying subscribers have already signed up.

Currently, the digest consists of six headlines, all linking to reporting from other publications, plus a link to The Daily Dash, which provides a high-level snapshot of stock market performance, the current state of the coronavirus pandemic and more.

Both Aft and Necef emphasized that The New Paper’s approach is “fact first.” Of course, there are plenty of news organizations that tout their objectivity and devotion to accuracy, but the pair seemed particularly determined to present their readers with a “common set of facts” about a story that everyone can agree on, regardless of their political leanings.

To illustrate the company’s approach, Aft pointed to the recent report on Russian election interference by the Senate Intelligence Committee. Rather than trying to make any “second order conclusions” about the report — conclusions that could be influenced by a writer or editor’s political beliefs — he said The New Paper focused on what was factually indisputable, namely that the committee had released its report.

As soon as he said that, I imagined editors past and present tearing their hair out — not because they’re liberals determined to make the Trump Administration look bad, but because the report’s findings (that Russian intelligence worked to interfere with the election, and that members of the Trump campaign were happy to accept the help) is the real news, rather than the simple fact of the report’s release.

Image Credits: The New Paper

In other words, emphasizing objectivity and facts sounds good, but it also risks leaving out crucial context or analysis. Plus, it’s become increasingly clear that facts rarely change people’s minds.

Still, despite my quibbles with the approach, I’m happy to report that I’ve been receiving the digest for the past week, and I’ve found it to be a convenient, comprehensive catch-up on the day’s news, with links that make it easy to learn more.

For now, Aft and Necef are writing the digest themselves, though they said much of the ranking and sorting is done by algorithms. Over time, they’re hoping to hire on both the technology side and the editorial side. They also plan to expand into other channels like email and voice.

Asked whether the subscription business model means that they don’t have to pursue a mass audience, Aft replied, “We think it’s so critically important to give people a common set of information. To make this a viable business model, do we need to be 100 million strong? Of course not. Is that the goal we’re targeting? Absolutely, because we are so passionate about the problem.”

Algorithmic recommendation systems on social media sites like YouTube, Facebook and Twitter, have shouldered much of the blame for the spread of misinformation, propaganda, hate speech, conspiracy theories and other harmful content. Facebook, in particular, has come under fire in recent days for allowing QAnon conspiracy groups to thrive on its platform and for helping militia groups to scale membership. Today, Facebook is attempting to combat claims that its recommendation systems are at any way at fault for how people are exposed to troubling, objectionable, dangerous, misleading, and untruthful content.

The company has, for the first time, made public how its content recommendation guidelines work.

In new documentation available in Facebook’s Help Center and Instagram’s Help Center, the company details how Facebook and Instagram’s algorithms work to filter out content, accounts, Pages, Groups and Events from its recommendations.

Currently, Facebook’s Suggestions may appear as Pages You May Like, “Suggested For You” posts in News Feed, People You May Know, or Groups You Should Join. Instagram’s suggestions are found within Instagram Explore, Accounts You May Like, and IGTV Discover.

The company says Facebook’s existing guidelines have been in place since 2016 under a strategy it references as “remove, reduce, and inform.” This strategy focuses on removing content that violates Facebook’s Community Standards, reducing the spread of problematic content that does not violate its standards, and informing people with additional information so they can choose what to click, read or share, Facebook explains.

The Recommendation Guidelines typically fall under Facebook’s efforts in the “reduce” area, and are designed to maintain a higher standard than Facebook’s Community Standards, because they push users to follow new accounts, groups, Pages and the like.

Facebook, in the new documentation, details five key categories that are not eligible for recommendations. Instagram’s guidelines are similar. However, the documentation offers no deep insight into how Facebook actually chooses how it chooses what to recommend to a given user. That’s a key piece to understanding recommendation technology, and one Facebook intentionally left out.

One obvious category of content that many not be eligible for recommendation includes those that would impede Facebook’s “ability to foster a safe community,” such as content focused on self-harm, suicide, eating disorders, violence, sexually explicit, regulated content like tobacco or drugs, content shared by non-recommendable accounts or entities.

Facebook also claims to not recommend sensitive or low-quality content, content users frequently say they dislike, and content associated with low-quality publishings. These further categories include things like clickbait, deceptive business models, payday loans, products making exaggerated health claims or offering “miracle cures,” content promoting cosmetic procedures, contest, giveaways, engagement bait, unoriginal content stolen from another source, content from websites that get a disproportionate number of clicks from Facebook versus other places on the web, news that doesn’t include transparent information about the authorship or staff.

In addition, Facebook claims it won’t recommend fake or misleading content, like those making claims found false by independent fact checkers, vaccine-related misinformation, and content promoting the use of fraudulent documents.

It says it will also “try” not to recommend accounts or entities that recently violated Community Standards, shared content Facebook tries to not recommend, posts vaccine-related misinformation, has engaged in purchasing “Likes,” has been banned from running ads, posted false information, or are associated with movements tied to violence.

The latter claim, of course, follows recent news that a Kenosha militia Facebook Event remained on the platform after being flagged 455 times after its creation, and had been cleared by 4 moderators as non-violating content. The associated Page had issued a “calls to arms” and hosted comments about people asking what types of weapons to bring. Ultimately, two people were killed and a third was injured at protests in Kenosha, Wisconsin when a 17-year old armed with an AR-15-style rifle broke curfew, crossed state lines, and shot at protestors.

Given Facebook’s track record, it’s worth considering how well Facebook is capable of abiding by its own stated guidelines. Plenty of people have found their way to what should be ineligible content, like conspiracy theories, dangerous health content, COVID-19 misinformation and more by clicking through on suggestions at times when the guidelines failed. QAnon grew through Facebook recommendations, it’s been reported.

It’s also worth noting, there are many gray areas that guidelines like these fail to cover.

Militia groups and conspiracy theories are only a couple examples. Amid the pandemic, U.S. users who disagreed with government guidelines on business closures can easily find themselves pointed towards various “reopen” groups where members don’t just discuss politics, but openly brag about not wearing masks in public or even when required to do so at their workplace. They offer tips on how to get away with not wearing masks, and celebrate their successes with selfies. These groups may not technically break rules by their description alone, but encourage behavior that constitutes a threat to public health.

Meanwhile, even if Facebook doesn’t directly recommend a group, a quick search for a topic will direct you to what would otherwise be ineligible content within Facebook’s recommendation system.

For instance, a quick search for the word “vaccines,” currently suggests a number of groups focused on vaccine injuries, alternative cures, and general anti-vax content. These even outnumber the pro-vax content. At a time when the world’s scientists are trying to develop protection against the novel coronavirus in the form of a vaccine, allowing anti-vaxxers a massive public forum to spread their ideas is just one example of how Facebook is enabling the spread of ideas that may ultimately become a global public health threat.

The more complicated question, however, is where does Facebook draw the line in terms of policing users having these discussions versus favoring an environment that supports free speech? With few government regulations in place, Facebook ultimately gets to make this decision for itself.

Recommendations are only a part of Facebook’s overall engagement system, and one that’s often blamed for directing users to harmful content. But much of the harmful content that users find could be those groups and Pages that show up at top of Facebook search results when users turn to Facebook for general information on a topic. Facebook’s search engine favors engagement and activity — like how many members a group has or how often users post — not how close its content aligns with accepted truths or medical guidelines.

Facebook’s search algorithms aren’t being similarly documented in as much detail.

The Smart Clock Essential really blurs smart display lines. Aesthetics aside, Lenovo’s news device probably has more in common with the Echo Dot with Clock than it does the company’s first generation Smart Clock. In fact, at $50, it’s actually $10 less expensive than Amazon’s offering.

Essentially the Essential is a Google Assistant smart speaker with a digital display. Which really makes you wonder what qualifies as “essential” these days. It shows the time and the weather on its LED, but offers none of the kind of touch interaction you’ve come to expect from the form factor. There are still buttons that can be used to set the alarm and “a built-in light that helps you walk around without bumping into things,” which fair enough.

But at the end of the day, it’s more akin to the Google Home Mini than the Nest Hub. And like the former, it’s priced so you can buy a bunch of them to and stick them at various spots throughout your house. There’s a 3W speaker, which is built more for alarm sounds than casual listening, though like other Google Assistant speakers, it can be paired as part of a group. Oh, and like the original Smart Clock, there’s a USB port on board for charging devices while you sleep.

Honestly, that $50 price point is really the biggest seller here, but it’s nice to see hardware makers like Lenovo playing around with the form factor a bit, as voice enabled device take up an increasing amount of real estate on our kitchen counters and bedside tables. Honestly, after testing the original Smart Clock, I’m not sure I want or need more functionality than Lenovo’s offering up here next to my bed.

It’s set to hit retail next month. Just don’t call it a smart display.

In a few short weeks, some of the best product developers from some of the world’s most important tech companies will take to the virtual stage of our virtual Disrupt this September 14-18 to share all the tips and tricks they’ve learned over decades spent working at Zoom, Slack, Facebook, Amazon, Hulu, and Oculus.

This isn’t a tribute to the  most important panel on tech development you’ll ever attend… it is the most important panel on tech product development you’ll attend.

Not only do we have Oded Gal, the man responsible for leading Zoom’s product management; not only do we have Eugene Wei, who’s forgotten more about product development in a career spanning Amazon, Hulu, Oculus, and Flipboard than most developers ever knew; not only do we have Julie Zhuo, the co-founder of Inspirit and the former VP of Product Design for the Facebook app; and not only do we have Tamar Yehoshua, who oversees product strategy and development, design and research at Slack, but we have you, our interactive audience to help me question these doyennes of design, these prestigious progenitors of product on their path to product nirvana.

In this session, we’ll discuss how to get not from zero to one, but from one to one billion in industries as diverse as communication, social networking, virtual reality, direct-to-consumer sales, and more.

It’s worth getting those questions ready to share now for this exclusive, incredibly special ExtraCrunch panel. Some things to remember about each of our illustrious and esteemed panelists:

Oded Gal worked at Blue Jeans Network and Cisco Webex before joining Zoom and also served as director of business development at Radvision.

Julie Zhuo was the VP of Product Design for the Facebook app, where she scaled it from 10 million users to over 2 billion. She’s also a bestselling author of the book “The Making of a Manager”, voted one of Amazon’s best business and leadership books of 2019.

Eugene Wei ran product teams at Amazon, Hulu, Flipboard, and Oculus.

Tamar Yehoshua previously worked as a Vice President at Google holding product and engineering leadership roles on Google’s most important products, including Search, Identity and Privacy. And before that, Tamar was the Vice President of Advertising Technologies at Amazon’s A9.

This panel is so good TechCrunch should definitely be getting someone else to lead it. But luckily, y’all will be there to help out.

So don’t delay, get those tickets now!

Disrupt 2020 runs from September 14 through September 18 and will be 100% virtual this year. Get your front row seat to see this panel live with a Disrupt Digital Pro Pass or a Digital Startup Alley Exhibitor Package. We’re excited to see you there.

Apple has some of the strictest rules to prevent malicious software from landing in its app store, even if on occasion a bad app slips through the net. But last year Apple took its toughest approach yet by requiring developers to submit their apps for security checks in order to run on millions of Macs unhindered.

The process, which Apple calls “notarization,” scans an app for security issues and malicious content. If approved, the Mac’s in-built security screening software, Gatekeeper, allows the app to run. Apps that don’t pass the security sniff test are denied, and are blocked from running.

But security researchers say they have found the first Mac malware inadvertently notarized by Apple.

Peter Dantini working with Patrick Wardle, a well-known Mac security researcher, found a malware campaign disguised as an Adobe Flash installer. These campaigns are common and have been around for years — even if Flash is rarely used these days — and most run unnotarized code, which Macs block immediately when opened.

But Dantini and Wardle found that one malicious Flash installer had code notarized by Apple and would run on Macs.

The malicious installer was notarized by Apple, and could be run on the latest versions of macOS. (Image: Patrick Wardle/supplied)

Wardle confirmed that Apple had approved code used by the popular Shlayer malware, which security firm Kaspersky said is the “most common threat” that Macs faced in 2019. Shlayer is a kind of adware that intercepts encrypted web traffic — even from HTTPS-enabled sites — and replaces websites and search results with its own ads, making fraudulent ad money for the operators.

“As far as I know, this is a first,” Wardle wrote in a blog post, shared with TechCrunch.

Wardle said that means Apple did not detect the malicious code when it was submitted and approved it to run on Macs — even on the unreleased beta version of macOS Big Sur, expected out later this year.

Apple revoked the notarized payloads after Wardle reached out, preventing the malware from running on Macs in the future.

In a statement, a spokesperson for Apple told TechCrunch: “Malicious software constantly changes, and Apple’s notarization system helps us keep malware off the Mac and allow us to respond quickly when it’s discovered. Upon learning of this adware, we revoked the identified variant, disabled the developer account, and revoked the associated certificates. We thank the researchers for their assistance in keeping our users safe.”

But Wardle said that the attackers were back soon after with a new, notarized payload, able to circumvent the Mac’s security all over again.

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

This is Equity Monday, our weekly kickoff that tracks the latest big news, chats about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here, and myself here, and don’t forget to check out last Friday’s episode.

This weekend was a welcome reprieve from last week’s insane news cycle inside the world of technology and money. If you are still catching your breath from the Great IPO Wave of last Monday, we feel you. Here’s what we got into this morning:

• The TikTok sale could be in trouble, this time due to China changing its rules on sales of tech firms that have certain algorithms. TikTok parent company Bytedance intends to comply with the rules, but what impact the news could have the sale of the social service is unclear as of yet, though the developments are not good if you were in favor of a deal.
• American tech shares are set to rise once again after setting records last week.
• Equity is back on YouTube, hell yeah!
• From the weekend: Medium’s growth in both traffic (pageviews) and income (paying subscribers) is super impressive according to its latest reporting. And the publishing platform and media company is doubling-down on product to fend off upstarts like the popular Substack. Per a Bloomberg report, tech IPO fundraising could set a record in 2020. And, to ground us in a macro-economic sense, Chinese banks are being forced to take a profit hit to support other companies.
• In the funding round domain, Semalytix raised €4.3 million in Series A funding according to TechCrunch for its pharmaceutical-AI service. And India-based Eruditus raised $113 million for its executive-focused education service. That’s a lot of money, but like we’ve been saying, edtech is hot.
• And, finally, will there be enough horns for all these hot SaaS rounds that are getting done in a blur today? What if SaaS revenue multiples slip by 20%? Then what? When deals go so fast that due diligence suffers, the hangover can last a bit.

And that is the week’s Monday ep, thanks for sticking with through our super-busy week last week. Whew!

Streaming services have built-in kids’ profiles, so why not devices? Google today is responding to parents’ demand for a better way for their children to interact with technology with the launch of the new “Google Kids Space,” a dedicated kids mode on Android tablets which will aggregate apps, books, and videos for kids to enjoy and learn from. The feature will launch first on the Lenovo Smart Tab M10 HD Gen 2, but Google aims to bring Kids Space to more devices in time.

The concept is somewhat similar to Amazon’s FreeTime, Amazon’s own well-built system for parental controls and access to approved and curated children’s’ apps and media. But in Google’s case, its new kids’ mode is building on top of the company’s earlier efforts focused on designing a safer, more controlled Android experience for families with children.

These efforts began with Family Link, a series of parental control features that’s now built into the Android OS. Family Link already allows parents to set screen time limits, engage content safety filters, set privacy controls, and more. Google then expanded into kids’ app curation with the launch of a Kids tab in Google Play where it can showcase “teacher-approved” mobile apps and games.

Image Credits: Google

The new Kids Space leverages Google’s earlier work in evaluating Android apps for its “Play” tab, and has expanded its curation to now include other types of quality content. For example, Google worked with publishers to make popular children’s books free of charge in Kids Space, and at launch offers over 400 free books in the “Read” tab for users in the U.S.

In the Kids Space’ “Watch” and “Make” tabs, Google is pulling in creative content from YouTube Kids that encourage off-screen activities.

Image Credits: Google

The feature is ultimately meant to be a selling point for Android devices and a way to lock families into the Google ecosystem. This differentiates it from Amazon’s FreeTime, which only partially has this aim. Amazon’s FreeTime is largely meant to a subscription offering, and it’s one that works across platforms — including Amazon devices like Fire tablets and Echo smart speakers, but also on iOS and Android devices. Google’s Kids Space, meanwhile, is only designed for Android.

Google Kids Space is initially available on on the Lenovo Tab M10 HD Gen 2. The company said it worked with Lenovo to ease the setup process for parents and to ensure that Kids Space is a pre-loaded feature. Google says it aims to bring Kids Mode to more Android tablets soon.

Rocket Lab is back to active launch status after encountering an issue with its last mission that resulted in a loss of the payload. In just over a month, Rocket Lab was able to identify what went wrong with the Electron launch vehicle used on that mission and correct the issue. On Sunday, it successfully launched a Sequoia satellite on behalf of client Capella Space from its New Zealand launch facility.

The “I Can’t Believe It’s Not Optical” mission is Rocket Lab’s 14th Electron launch, and it lifted off from the company’s private pad at 11:05 PM EDT (8:05 PM PDT). The Sequoia satellite is the first in startup Capella Space’s constellation of Synthetic Aperture Radar (SAR) satellites to be available to general customers. When complete, the constellation will provide hourly high-quality imaging of Earth, using radar rather than optical sensors in order to provide accurate imaging regardless of cloud cover and available light.

This launch seems to have gone off exactly as planned, with the Electron successfully lifting off and delivering the Capella Space satellite to its target orbit. Capella had been intending to launch this spacecraft aboard a SpaceX Falcon 9 rocket via a rideshare mission, but after delays to that flight, it changed tack and opted for a dedicated launch with Rocket Lab.

Rocket Lab’s issue with its July 4 launch was a relatively minor one – an electrical system failure that caused the vehicle to simply shut down, as a safety measure. The team’s investigation revealed a component of the system that was not stress-tested as strenuously as it should’ve been, and Rocket Lab immediately instituted a fix for both future and existing in-stock Electron vehicles in order to get back to active flight in as little time as possible.

While Rocket Lab has also been working on a recovery system that will allow it to reuse the booster stage of its Electron for multiple missions, this launch didn’t involve any tests related to that system development. The company still hopes to test recovery of a booster sometime before the end of this year on an upcoming launch.

SpaceX performed a milestone first polar orbital launch of a satellite from its East Coast launch facility at Cape Canaveral on Sunday. The Falcon 9 mission carried three payloads, including a SAOCOM-1B synthetic aperture radar satellite which was flown on behalf of the Argentine space agency, and two small satellites for clients Tyvack and PlanetiQ.

The launch took place at 7:18 PM EDT from Florida, and used a first stage booster that SpaceX previously flew on two separate commercial resupply missions on behalf of NASA for the international Space Station, as well as one of SpaceX’s recent Starlink internet satellite launches. SpaceX also recovered the booster again with a controlled landing back at their landing site at Cape Canaveral.

This was originally set to be one of two launches that SpaceX was going to perform on Sunday – both from the same launch facility, though at different pads. That would’ve been a historic first, but weather earlier in the day meant that the first mission on the schedule, a Starlink launch, was cancelled and will be rescheduled.

SpaceX would ultimately like to be launching at a cadence that would include multiple launches per day, and this would’ve been a great test of its ability to operationalize that ambition. Considering how aggressive the company has been with its Starlink launches, however, it seems likely we’ll encounter another opportunity for a double launch day at some point in the future.

Semalytix, a Bielefeld, Germany-based startup that offers pharmaceutical companies an AI-powered data tool to better understand real-world patient experiences, has raised €4.3 million in Series A funding.

Leading the round is venture capital firm btov Partners, with participation from existing investor Fly Ventures and several unnamed angels. Semalytix will use the injection of cash to expand its business development with pharma companies and the wider healthcare market.

Founded in 2015 as a spin-out of research group Semantic Computing, Semalytix pitches itself as a data and A.I. analytics startup that wants to bring more real-world evidence to the development of new drugs and treatments. Its flagship product, dubbed “Pharos”, is a patient research tool that pulls in and cleans up various unstructured public data — such as blogs, forums, social media etc. — and then applies algorithms to deliver real-time patient insights into unmet needs, treatment experience and how severely a disease impacts the lives of those who suffer from it.

“Our vision is that we help make patient insights a real Northstar KPI in drug development,” Semalytix co-founder and CEO Janik Jaskolski tells me. “Due to new regulatory initiatives (and public pressure), pharma needs to demonstrate patient-centricity in drug development, [and] include the patient perspective into decision making and produce evidence that their treatments provide value in the real world. For patients, that value usually doesn’t consist of, for example, having their blood sugar lowered by an additional 3%. Instead, they care about improving their quality of life, being able to play longer with their kids or simply having an easier time going about their everyday tasks”.

However, Jaskolski argues that such patient insights and related evidence is difficult to obtain. “If asked, a patient will often tell a different story about how a disease impacts their life and what they need to improve it, compared to what a doctor would say. Which is why we don’t analyse physician or hospital data. Instead, we are looking at already existing public data that patients share online, in their own authentic voice, all around the world”.

Semalytix’s AI claims to be able to identify, read through, and summarise millions of online patient journeys in a highly scalable way. The AI is also able to turn this data into online target populations for different diseases and covers 11 different languages. “It does so by applying WHO, FDA, and EMA inspired algorithmic research instruments to make the analysis transparent and scientifically meaningful for pharma,” adds Jaskolski.

Image Credits: Semalytix

Meanwhile, although electronic health records, patient registries, and similar data sources are already receiving much attention from startups, Jaskolski argues that the largest source of unstructured patient data that exists today is being overlooked and yet holds a lot of potential to “improve patient care, identify new therapeutic opportunities, inform clinical trial development, and even help accelerate development of novel therapies for rare conditions”.

Semalytix’s business model is a tried and tested one. The startup sells enterprise licenses for access to its platform. A company can buy a license for 12 months or more for specific diseases. “Each license enables disease specific sub-group analyses, assess populations and create cohorts based on the severity of different disease burdens, treatment experiences, and quality of life,” adds the Semalytix CEO.

“Over time, we want to include more and more diseases into the platform and provide a unique patient data stream to pharma but also to the payer and regulator side of healthcare”.

Over the past year, Netflix has attempted to expand its appeal in part by making a title or two free to non-paying users in select markets. Now the American giant is extending this test to users across the globe — with a larger free catalog.

The on-demand video streaming service is currently offering select Netflix Original movies and TV shows including “Stranger Things”, “Murder Mystery”, “Elite”, “Bird Box”, “When They See Us”, “The Two Popes”, “Our Planet”, and Grace and Frankie” to non-paying subscribers across all the nearly 200 nations and territories where it is operational.

“We’re looking at different marketing promotions to attract new members and give them a great Netflix experience,” a Netflix spokesperson told TechCrunch in a statement.

Users do not need to create an account to view these free shows or movies, Netflix says. The free viewing, first spotted by blog OnlyTech, is accessible only through web browsers. On a support page, Netflix says Android users can access this offer through their mobile browser as well — but iOS users can’t.

This isn’t the first time Netflix has tested making a title free to non-paying users. The streaming giant, which had over 151 million subscribers at the end of second quarter this year, has previously made “To All the Boys I’ve Loved Before” available to users in the U.S.

It also made “Bard of Blood”, a movie it produced in India, free to users in the country. It also made talk show “Patriot Act with Hasan Minhaj” available to users for free on YouTube. The company had initially planned to make only first two episodes free on YouTube.

But this is the first time Netflix is making so many shows and movies available to non-paying users across the globe. The company has not shared how long it plans to run this experiment.

Speaking of India, the streaming giant has run several experiments in the country. It has made Netflix available for a few cents for the first month for new users, and tested several affordable plans.

Mumbai-based Eruditus, which works with top universities globally to offer more than 100 executive-level courses to students in over 80 nations, said on Monday it has raised $113 million in a new financing round as it looks to further scale its business to reach more learners.

The Series D financing round for the 10-year-old startup was co-led by Leeds Illuminate and Prosus Ventures. Chan Zuckerberg Initiative and existing investors Sequoia India and Ved Capital also participated in the round, which brings Eruditus’ to-date raise to over $160 million. Eruditus is now valued at over $700 million, a person familiar with the matter said. Avendus Capital was the financial advisor to Eruditus on this transaction.

Eruditus maintains a tie-up with over 30 top-tier universities including MIT, Harvard, Columbia, Cambridge, INSEAD, Wharton, UC Berkeley, IIT, IIM, and NUS. The universities and Eruditus work to develop courses that are aimed at offering higher education to students. These courses cost anything between $5,000 to $40,000.

The startup, which has offices in six countries and employs over 650 people, said it has enrolled 50,000 students in the past 12 months.

Eruditus is the second startup that Chan Zuckerberg Initiative has backed in India. Its first investment in the country, Byju’s, also operates in the edtech market. (In fact, it’s grown to become the most valued edtech startup in the world.)

“Eruditus serves as a critical innovation partner for top universities as they expand online course offerings in response to workforce needs and market demand,” said Vivian Wu, Managing Partner, Ventures, Chan Zuckerberg Initiative, in a statement. “We’re excited to support the growing partnerships between U.S. universities and those in India, China and Latin America that are making truly high-quality education accessible to a broad and diverse range of students.”

Eruditus said it will use the fresh capital to partner with more universities and expand in emerging markets. It said it also wants to invest in developing career-ready courses to help the workforce acquire the skills they need to survive in the post-pandemic world.

“Eruditus’ goals are a great match for ours — democratizing access of quality resources for a much broader audience. The value of the teachings of the great institutions has been rationed to those who can physically and monetarily access their facilities. Eruditus unlocks those assets and enables those institutions to help a whole new cohort of learners around the globe,” said Ashutosh Sharma, Head of Investments for India at Prosus Ventures, which has invested in six edtech startups including Byju’s.

TechCrunch Disrupt is right around the corner. And this year, we’re trying something different — we’re taking Disrupt virtual. That’s why we’re excited to announce that we used this opportunity to invite a slate of incredible European speakers to join TechCrunch on our virtual stage on September 14-18.

It represents a great opportunity to learn more about the European tech ecosystem. And if you’re already familiar with the area, it’s a good way to discover what everyone’s thinking on the current situation and where we’re heading.

Available at a time that works best for you, catch these sessions Sept 15-18th from 10:00 AM – 11:00 AM CET. Immediately after each interview, join the speakers for a live Q&A. So come with your questions!

Let me introduce briefly all the speakers we’ve lined up for the special European corner of Disrupt.

Sophia Bendz has been in the news lately. A few years ago, the former global director of marketing for Spotify decided to transition from seasoned operator to venture capitalist. She worked with VC firm Atomico for a while but announced this summer that she is joining Berlin’s Cherry Ventures to focus on seed investments. The move shouldn’t surprise anyone given that Bendz has also been a very active angel investor with 44 deals over the past 9 years.

Carolina Brochado has worked with some of the most successful VC firms and is also on the move. She was made a partner at Atomico in 2016 and took everyone by surprise when she left for SoftBank Vision Fund in 2018. The well-respected investor has now decided to join the growth fund team at EQT.

Suranga Chandratillake spent many years in Silicon Valley working on blinkx, an intelligent search engine for video and audio content that went public and achieved a peak market capitalization in excess of $1 billion. He moved back to the his home country to join Balderton as a General Partner in 2014.

Sophie Hill has been busy building Threads Styling. She’s redefining luxury fashion e-commerce with a radical model. The startup uses a strong editorial strategy to send you recommendations through your favorite chat app on your phone. You can talk with human shopping assistants on WeChat, WhatsApp, Snapchat, Instagram and iMessage. And this no-store e-commerce play has been working really well.

Hussein Kanji is a founding partner of London-based VC firm Hoxton Ventures. In just a few years, Hoxton Ventures became a well-known name with deals in Darktrace, Babylon Health and Deliveroo. Prior to Hoxton Ventures, Kanji worked for Accel, Microsoft and several Silicon Valley-based companies.

Tunde Kehinde is the co-founder of Lidya, a startup that uses AI to lend capital to small companies in fast-growing economies. The startup currently operates in Lagos, Warsaw and Prague. He was also the co-founder of Jumia Nigeria, a company that is now publicly listed in the New York Stock Exchange.

Mette Lykke co-founded one of the biggest fitness and training app out there, Endomondo. She led her company all the way to an acquisition by Under Armour. For the past three years, she’s been the CEO of Too Good To Go, an app with a mission of reducing food waste worldwide. Restaurants and supermarkets can sell the surplus food that would otherwise go to waste through the service. And the startup managed to attract more than 23 million users.

Ilkka Paananen is the co-founder and CEO of Supercell, the Helsinki-based mobile gaming studios that have released super hits, such as Clash of Clans, Hay Day, Boom Beach, Clash Royale and Brawl Stars. The company managed to reach 100 million daily players across its games. When Tencent bought a majority stake in the company, it valued Supercell at around $10.2 billion.

Guillaume Pousaz is the founder and CEO of Checkout.com. While Checkout.com has kept a low profile for many years, the company raised $380 million within a year and reached an impressive valuation of $5.5 billion. It wants to build a one-stop shop for all things related to payments, such as accepting transactions, processing them and detecting fraud.

If you want to hear from one, two or maybe all of the speakers above, join us for Disrupt 2020. The conference is scheduled to run from September 14 through September 19. Buy the Disrupt Digital Pro Pass or a Digital Startup Alley Exhibitor Package today and get access to all the interviews on our main stage, workshops over on the Extra Crunch Stage where you can get actionable tips as well as CrunchMatch, our free, AI-powered networking platform. As soon as you register for Disrupt, you will have access to CrunchMatch and can start connecting with people now. Use the tool to schedule one-on-one video calls with potential customers and investors or to recruit and interview prospective employees.