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July 18, 2018
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Glasswing Ventures closes its artificial intelligence-focused fund with $112 million

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One year after receiving a whopping $75 million commitment to invest in early stage companies applying artificial intelligence to various industries, Glasswing Ventures has closed its debut fund with $112 million. 

It’s a significant milestone for a firm that purports to be the largest early stage investor focused on machine learning on the East Coast, and one of the largest early stage funds to be led by women.

Founded by Rudina Seseri alongside her longtime investing partner Rick Grinnell and bolstered by the addition of former portfolio executive Sarah Fay, Glasswing so far has invested in three startups: BotChain (a company spun up from Glasswing’s early investment in the AI management company, Talla); Allure Security, a threat detection company; and Terbium Labs, whose service alerts companies when sensitive or stolen information of theirs appears on the Internet.

For Seseri and Glasswing, the close is actually just the beginning. As she said in a statement:

“Raising an AI-focused fund on the East Coast is just the beginning for Glasswing Ventures. As we embark on a journey to shape the future, we are laser-focused on investing in exceptional founders who leverage AI to build disruptive companies and transform markets. Beyond providing smart capital, we are firmly committed to supporting our entrepreneurs with all facets of building and scaling their businesses.”

The story, for Seseri and her co-founder Grinnell actually begins nearly a decade ago at the venture firm Fairhaven Capital, the rebranded investment arm of the TD Bank Group.

At the time of the firm’s launch in 2016, Glasswing was targeting $150 million for its first fund, with a 2.5% management fee and 20% carried interest (pretty standard terms for a venture fund), according to reporting by Dan Primack back when he was at Fortune.

In a pitchdeck seen by Primack the firm was touting 4.25x return multiple on its investments including 6x realized and 1.8x unrealized in deals like Grinnell’s exit from EqualLogic (which was sold to Dell for $1.46 billion) and Seseri’s investments in Jibo (which is now basically worthless) and SocialFlow (which isn’t).

Fay, who worked at a portfolio investment of Fairhaven’s, was brought on soon after the two partners launched their new venture.

Glasswing definitely benefits from the firm’s proximity to Boston’s stellar universities. And Seseri, a Harvard University graduate maintains close ties with the research community at both Harvard and MIT — tapping luminaries like Tim Berners-Lee to sit on the firm’s advisory council for networking. 

Chase Martin, Marketing and Events Manager, Emma Marty, Operations and Support Coordinator, Rick Grinnell, Founder and Managing Partner, Rudina Seseri, Founder and Managing Partner, Sarah Fay, Managing Director, and Andre Rocha, Investment Associate 

News Source = techcrunch.com

A new $124 million for Brazil’s Movile proves that investors still see promise in Latin American tech

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Brazil’s macroeconomic picture may be gloomy, but technology investors still see hope in the nation’s burgeoning technology sector — and a recent $124 million financing for the mobile conglomerate Movile is the latest proof that that the pace of investment isn’t slowing down.

Brazil was already the hottest spot for technology investment throughout Latin America — with Sao Paulo drawing in the majority of the record-breaking $1 billion in financing that the region’s startups attracted in 2017. And with this latest funding for Movile, led by Naspers, that trend looks likely to continue.

Indeed, Naspers investments in Movile (supplemented by co-investors like Innova, which participated in the most recent round) have been one of the driving forces sustaining the Brazilian startup community. In all, the South African technology media and investment conglomerate has invested $375 million into Movile over the course of several rounds that likely value the company at close to $1 billion.

Another Brazilian tech company, the financial services giant Nubank, has raised around $528 million (according to Crunchbase) and is valued at roughly $2 billion, putting it squarely in the “unicorn club”, as the Latin American Venture Capital Association noted, earlier this year.

Both chief executive Fabricio Bloisi and a spokesperson from Naspers declined to comment on Movile’s valuation. “My dream is not to become a unicorn my dream is to become much bigger than that,” Bloisi said in an interview.

Nubank and Movile are the two most recent privately held independent companies to achieve or approach unicorn status in Brazil, but they’re not alone in reaching or approaching the billion dollar threshold in Latin America. MercadoLibre was an early runaway success for the region (hailing from Argentina) and the ride hailing service 99Taxis was acquired by the Chinese ride-hailing behemoth Didi for a roughly $1 billion dollar valuation last year.

All of this points to an appetite for Latin American tech that Movile is hoping it can seize upon with its new $124 million in financing.

The company is looking to expand its food delivery business iFood, its payment company, Zoop, and its ticketing platform, Sympla.

Both Movile and Naspers look to Chinese companies as their model and inspiration for growth, with Bloisi saying that he’s eyeing the eventual public offering for Meituan — the Chinese online retailer as the company to emulate in the market these days.

“The Chinese companies are doing extremely well and Movile is very similar to a Chinese company,” says Bloisi. And the company’s buy and build strategy certainly mirrors that of a tech business in the world’s largest emerging market economy moreso than it does a typical U.S. startup.

That extends to Movile’s investment in the tech ecosystem in its native Brazil and the broader Latin American region. Already the company boasts 150 million users per month across its application ecosystem. Through on-click payment services provided by Zoop, Movile offers a WePay and WeChat like experience for buyers in Latin America, Bloisi said.

It’s a playbook that the company’s backers have run before — with WeChat. Naspers came to prominence and untold riches by being an early backer of Tencent who’s WeChat and WePay applications have become the backbone of mobile commerce in China.

Now it’s looking to replicate that with Movile in Brazil and beyond. Like its Chinese counterparts, Movile is more than just one of the largest startup companies in the Brazilian ecosystem… it’s also a big investor. Indeed, subsidiaries like iFood began as small investments the company made in promising businesses.

It was with its last $82 million round of financing from Naspers and other co-investors that Movile backed Mercadoni, a Colombian grocery business, and its payment services play in Brazil — Zoop (which is one of the company’s main areas of interest going forward).

For Bloisi, that future outlook seems pretty bright. “Our confidence is extremely high,” he says of the recent financing. “For me it’s an indicator that things are growing. There was a hot moment in Latin America in 2010-2012. Then there was a recession, now while Movile is raising more there are also many more players,” who are coming to market with convincing offerings for investors. 

Movile itself isn’t afraid to let its checkbook do the talking for it when it comes to confidence in the market for online retail and commerce in Brazil. Bloisi estimates that his company has made nearly 35 transactions over the past few years, and will continue to invest heavily in the sector.

“Many of our business are growing at over 100% per year,” Bloisi said.

Investors like Martin Tschopp the chief executive of Naspers can’t complain about that kind of growth across multiple business units.

As the executive said in a satement:

“Naspers has been a long-term partner of Movile because of its ability to build transformative mobile businesses in Latin America and beyond. Movile has great expertise in identifying high-potential companies in consumer segments with opportunity for massive growth, including food delivery with iFood, which is why we continue to support the company.”

That sentiment, an optimism about the future of technology enabled businesses in Brazil and the broader Latin American region has captured investors’ imagination from billionaire backed offices like the Russian investment firm DST and large multinational U.S.-based players like Goldman Sachs.

As HIllel Moerman, head of Goldman’s private capital investment group told The Financial Times, “The [venture capital] ecosystem is still nascent compared to the US and other international markets — therefore there is a large opportunity for start-ups.”

Beyond the relative maturity of the venture community, there are macroeconomic forces at play that continue to make the Brazilian market attractive.

“Brazil has a large market, a pretty tech savvy population with attractive demographics and decent engineering and computing talent. You have all the right ingredients for an ecosystem to develop,” Tom Stafford, an investor with DST Global, told the British paper in an interview.

 

News Source = techcrunch.com

Coya raises $30 million to launch its insurance service in Europe

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Coya, a Berlin-based insurance startup, has raised $30 million in new cash as investors around the world continue to see opportunities in modernizing the insurance industry.

Founded by two early employees at the European credit and risk assessment unicorn startup Kreditech (which raised EUR110 million from the Naspers subsidiary PayU) and two seasoned executives from the European insurance industry, Coya is coming to market in Germany with a new renter’s insurance service.

For Coya’s co-founder Andrew Shaw, the new company was an opportunity to apply his experience creating credit and risk assessment products to an industry whose cumbersome inability to use technology had affected him personally.

The idea for Coya hit Shaw when he was traveling on the Gili Islands off the coast of Indonesia. It was there, while Shaw was trying to get information on his insurance as he recovered from an illness that he decided to start his technologically enabled insurance business.

“I knew I had one or two [policies] somewhere, but couldn’t find them in email or log into the webpage, I felt left alone and realized how insurers are not concentrating on their product experience,” Shaw wrote to me in an email. “A bad insurance experience, plus the opportunity to create awesome technology in an outdated financial space was a challenge I couldn’t ignore.”

In 2016, Kreditech’s first employee launched the company with co-founders Sebastian Villaroel, a fellow former Kreditech employee; Peter Hagen, the former chief executive of Vienna Insurance Group; and Thomas Muenkel, a longtime executive at Allianz and the former chief operating officer of Uniqa Insurance.

Peter Hagen, Andrew Shaw, Sebastian Villaroel, and Thomas Münkel, co-founders Coya AG Berlin/Courtesy: Christian Manthey Photography

The company has raised a total of $40 million for its service from investors including Valar Ventures (the Peter Thiel-backed investment firm), eVentures, La Famiglia, and a slew of angel investors.

With the money, Coya hopes to establish its footprint in its first market — Germany before expanding to the rest of Europe. Powering that expansion is a German insurance license which the company is close to receiving, according to Shaw. Once that license is acquired, the company can access all 550 million European Union residents under the watchful eye of Germany’s regulators.

Although, Coya is starting with renter’s insurance, Shaw and his co-founders have big plans for the company’s platform with insurance products across property, accident, personal liability and personal finance.

The company has 55 people on staff now, and expects to increase its headcount as a result of the new financing, according to Shaw.

Shaw says that Coya is different from many of the other startups pitching insurance products across Europe thanks to its push to receive regulatory approval and issue its own policies. That’s also created more capital requirements for the business starting out.

There’ve been a slew of insurance startups coming to market with novel twists on the service. Among them, Shaw pointed to Lemonade in the U.S., wefox in the Germany, and the UK-based Sherpa as companies bringing innovation to the old industry.

 

News Source = techcrunch.com

A simple solution to end the encryption debate

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Criminals and terrorists, like millions of others, rely on smartphone encryption to protect the information on their mobile devices. But unlike most of us, the data on their phones could endanger lives and pose a great threat to national security.

The challenge for law enforcement, and for us as a society, is how to reconcile the advantages of gaining access to the plans of dangerous individuals with the cost of opening a door to the lives of everyone else. It is the modern manifestation of the age-old conflict between privacy versus security, playing out in our pockets and palms.

One-size-fits all technological solutions, like a manufacturer-built universal backdoor tool for smartphones, likely create more dangers than they prevent. While no solution will be perfect, the best ways to square data access with security concerns require a more nuanced approach that rely on non-technological procedures.

The FBI has increasingly pressed the case that criminals and terrorists use smartphone security measures to avoid detection and investigation, arguing for a technological, cryptographic solution to stop these bad actors from “going dark.” In fact, there are recent reports that the Executive Branch is engaged in discussions to compel manufacturers to build technological tools so law enforcement can read otherwise-encrypted data on smartphones.

But the FBI is also tasked with protecting our nation against cyber threats. Encryption has a critical role in protecting our digital systems against compromises by hackers and thieves. And of course, a centralized data access tool would be a prime target for hackers and criminals. As recent events prove – from the 2016 elections to the recent ransomware attack against government computers in Atlanta – the problem will likely only become worse. Anything that weakens our cyber defenses will only make it more challenging for authorities to balance these “dual mandates” of cybersecurity and law enforcement access.

There is also the problem of internal threats: when they have access to customer data, service providers themselves can misuse or sell it without permission. Once someone’s data is out of their control, they have very limited means to protect it against exploitation. The current, growing scandal around the data harvesting practices on social networking platforms illustrates this risk. Indeed, our company Symphony Communications, a strongly encrypted messaging platform, was formed in the wake of a data misuse scandal by a service provider in the financial services sector.

(Photo by Chip Somodevilla/Getty Images)

So how do we help law enforcement without making data privacy even thornier than it already is? A potential solution is through a non-technological method, sensitive to the needs of all parties involved, that can sometimes solve the tension between government access and data protection while preventing abuse by service providers.

Agreements between some of our clients and the New York State Department of Financial Services (“NYSDFS”), proved popular enough that FBI Director Wray recently pointed to them as a model of “responsible encryption” that solves the problem of “going dark” without compromising robust encryption critical to our nation’s business infrastructure.

The solution requires storage of encryption keys — the codes needed to decrypt data — with third party custodians. Those custodians would not keep these client’s encryption keys. Rather, they give the access tool to clients, and then clients can choose how to use it and to whom they wish to give access. A core component of strong digital security is that a service provider should not have access to client’s unencrypted data nor control over a client’s encryption keys.

The distinction is crucial. This solution is not technological, like backdoor access built by manufacturers or service providers, but a human solution built around customer control.  Such arrangements provide robust protection from criminals hacking the service, but they also prevent customer data harvesting by service providers.

Where clients choose their own custodians, they may subject those custodians to their own, rigorous security requirements. The clients can even split their encryption keys into multiple pieces distributed over different third parties, so that no one custodian can access a client’s data without the cooperation of the others.

This solution protects against hacking and espionage while safeguarding against the misuse of customer content by the service provider. But it is not a model that supports service provider or manufacturer built back doors; our approach keeps the encryption key control in clients’ hands, not ours or the government’s.

A custodial mechanism that utilizes customer-selected third parties is not the answer to every part of the cybersecurity and privacy dilemma. Indeed, it is hard to imagine that this dilemma will submit to a single solution, especially a purely technological one. Our experience shows that reasonable, effective solutions can exist. Technological features are core to such solutions, but just as critical are non-technological considerations. Advancing purely technical answers – no matter how inventive – without working through the checks, balances and risks of implementation would be a mistake.

News Source = techcrunch.com

Two Facebook and Google geniuses are combining search and AI to transform HR

in Artificial Intelligence/bloomreach/california/chief technology officer/Delhi/executive/Facebook/foundation capital/Google/IBM/India/lightspeed ventures/online advertising/partner/personalization/Politics/san francisco bay area/Silicon Valley/TC/world wide web by

Two former product wizards from Facebook and Google are combining Silicon Valley’s buzziest buzz words –search, artificial intelligence, and big data — into a new technology service aimed at solving nothing less than the problem of how to provide professional meaning in the modern world.

Founded by chief executive Ashutosh Garg, a former search and personalization expert at Google and IBM research, and chief technology officer Varun Kacholia, who led the ranking team at Google and YouTube search and the News Feed team at Facebook, Eightfold.ai boasts an executive team that has a combined eighty patents and over 6,000 citations for their research.

The two men have come together (in perhaps the most Silicon Valley fashion) to bring the analytical rigor that their former employers are famous for to the question of how best to help employees find fulfillment in the workforce.

“Employment is the backbone of society and it is a hard problem,” to match the right person with the right role, says Garg. “People pitch recruiting as a transaction… [but] to build a holistic platform is to build a company that fundamentally solves this problem,” of making work the most meaningful to the most people, he says.

 

It’s a big goal and it’s backed $24 million in funding provided by some big time investors — Lightspeed Ventures and Foundation Capital .

The company’s executives say they want to wring all of the biases out of recruiting, hiring, professional development and advancement by creating a picture of an ideal workforce based on publicly available data collected from around the world. That data can be parsed and analyzed to create an almost Platonic ideal of any business in any industry.

That image of an ideal business is then overlaid on a company’s actual workforce to see how best to advance specific candidates and hire for roles that need to be filled to bring a business closer in line with its ideal.

“We have crawled the web for millions of profiles… including data from wikipedia,” says Garg. “From there we have gotten data round how people have moved in organizations. We use all of this data to see who has performed well in an organization or not. Now what we do… we build models over this data to see who is capable of doing what.”

There are two important functions at play, according to Garg. The first is developing a talent network of a business — “the talent graph of a company”, he calls it. “On top of that we map how people have gone from one function to another in their career.”

Using those tools, Garg says Eightfold.ai’s services can predict the best path for each employee to reach their full potential.

 

The company takes its name from Buddhism’s eightfold path to enlightenment, and while I’m not sure what the Buddha would say about the conflation of professional development with spiritual growth, Garg believes that he’s on the right track.

“Every individual with the right capability and potential placed in the right role is meaningful progress for us,” says Garg. 

Eightfold.ai already counts over 100 customers using its tools across different industries. It’s software has processed over 20 million applications to-date, and increased response rates among its customers by 700 percent compared to the industry average all while reducing screening costs and time by 90 percent, according to a statement.

“Eightfold.ai has an incredible opportunity to help people reach their full potential in their careers while empowering the workforces of the future,” said Peter Nieh, a partner at Lightspeed Ventures in a statement. “Ashutosh and Varun are bringing to talent management the transformative artificial intelligence and data science capability that they brought to Google, YouTube and Facebook.  We backed Ashutosh previously when he co-founded BloomReach and look forward to partnering with him again.”

The application of big data and algorithmically automated decision making to workforce development is a perfect example of how Silicon Valley approaches any number of problems — and with even the best intentions, it’s worth noting that these tools are only as good as the developers who make them.

Indeed, Kacholia and Garg’s previous companies have been accused on relying too heavily on technology to solve what are essentially human problems.

The proliferation of propaganda, politically-minded meddling by foreign governments in domestic campaigns, and the promotion of hate speech online has been abetted in many cases by the faith technology companies like Google and Facebook have placed in the tools they’ve developed to ensure that their information and networking platforms function properly (spoiler alert: they’re not).

And the application of these tools to work — and workforce development — is noble, but should also be met with a degree of skepticism.

As an MIT Technology Review article noted from last year,

Algorithmic bias is shaping up to be a major societal issue at a critical moment in the evolution of machine learning and AI. If the bias lurking inside the algorithms that make ever-more-important decisions goes unrecognized and unchecked, it could have serious negative consequences, especially for poorer communities and minorities. The eventual outcry might also stymie the progress of an incredibly useful technology (see “Inspecting Algorithms for Bias”).

Algorithms that may conceal hidden biases are already routinely used to make vital financial and legal decisions. Proprietary algorithms are used to decide, for instance, who gets a job interview, who gets granted parole, and who gets a loan.

“Many of the biases people have in recruiting stem from the limited data people have seen,” Garg responded to me in an email. “With data intelligence we provide recruiters and hiring managers powerful insights around person-job fit that allows teams to go beyond the few skills or companies they might know of, dramatically increasing their pool of qualified candidates. Our diversity product further allows removal of any potential human bias via blind screening. We are fully compliant with EEOC and do not use age, sex, race, religion, disability, etc in assessing fit of candidates to roles in enterprises.”

Making personnel decisions less personal by removing human bias from the process is laudable, but only if the decision-making systems are, themselves, untainted by those biases. In this day and age, that’s no guarantee.

News Source = techcrunch.com

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