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December 10, 2018
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Contentful raises $33.5M for its headless CMS platform

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Contentful, a Berlin- and San Francisco-based startup that provides content management infrastructure for companies like Spotify, Nike, Lyft and others, today announced that it has raised a $33.5 million Series D funding round led by Sapphire Ventures, with participation from OMERS Ventures and Salesforce Ventures, as well as existing investors General Catalyst, Benchmark, Balderton Capital and Hercules. In total, the company has now raised $78.3 million.

It’s only been less than a year since the company raised its Series C round and as Contentful co-founder and CEO Sascha Konietzke told me, the company didn’t really need to raise right now. “We had just raised our last round about a year ago. We still had plenty of cash in our bank account and we didn’t need to raise as of now,” said Konietzke. “But we saw a lot of economic uncertainty, so we thought it might be a good moment in time to recharge. And at the same time, we already had some interesting conversations ongoing with Sapphire [formeraly SAP Ventures] and Salesforce. So we saw the opportunity to add more funding and also start getting into a tight relationship with both of these players.”

The original plan for Contentful was to focus almost explicitly on mobile. As it turns out, though, the company’s customers also wanted to use the service to handle its web-based applications and these days, Contentful happily supports both. “What we’re seeing is that everything is becoming an application,” he told me. “We started with native mobile application, but even the websites nowadays are often an application.”

In its early days, Contentful also focuses only on developers. Now, however, that’s changing and having these connections to large enterprise players like SAP and Salesforce surely isn’t going to hurt the company as it looks to bring on larger enterprise accounts.

Currently, the company’s focus is very much on Europe and North America, which account for about 80% of its customers. For now, Contentful plans to continue to focus on these regions, though it obviously supports customers anywhere in the world.

Contentful only exists as a hosted platform. As of now, the company doesn’t have any plans for offering a self-hosted version, though Konietzke noted that he does occasionally get requests for this.

What the company is planning to do in the near future, though, is to enable more integrations with existing enterprise tools. “Customers are asking for deeper integrations into their enterprise stack,” Konietzke said. “And that’s what we’re beginning to focus on and where we’re building a lot of capabilities around that.” In addition, support for GraphQL and an expanded rich text editing experience is coming up. The company also recently launched a new editing experience.

News Source = techcrunch.com

SimbaPay launches Kenya to China payment service via WeChat

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Forging another link between Africa and China’s digital economies, the African-focused money transfer startup SimbaPay and Kenya’s Family Bank are partnering with WeChat to launch an instant payment service from East-Africa to China.

The product partnership is aimed at Kenyan merchants who purchase goods from China—Kenya’s largest import source.

Using QR codes, SimbaPay developed a third-party payment aggregator that enables funds delivery into WeChat’s billion plus user network.

Individuals and businesses can now send funds to China through Family Bank’s PesaPap app, Safaricom’s M-Pesa, or by texting USSD using the code *325#.

The service opens up a faster and less expensive money transfer option between Kenya and China through the TenCent-owned WeChat social media platform.

“Kenya imports about $4 billion goods from China. That’s the total market that we’re getting into. We’re looking at a single digit market share of the transactional volume around that,” SimbaPay Founder and CEO Sagini Onyancha told TechCrunch.

“The users [of the new product] are primary small Kenyan businesses, that import phones, gadgets, electronics…small to medium size traders who import goods from China,” he said.

SimbaPay and Family Bank will generate revenues on the WeChat based transfer service through a fee share arrangement on transactions. “We have a sliding scale of charges [for the service]. For example, to send the equivalent of $80 will cost $3.50,” said Sagini.

This presents a significant reduction of fees and opportunity cost for Kenyan traders who import from China, according to Sagini and Family Bank.

Current available payment methods to China for Kenyan businesses are less secure and more expensive options such as traditional money transmitters (Western Union), SWIFT, and off the grid services, according to Sagini and Family Bank Chief Operation Officer (COO) Godfrey Kariuki Kamau.

“There are informal channels on the street who will take your money, get it paid out to the recipient [in China] one or two days later and take a percentage,” said Sagini.

SimbaPay and Family Bank estimate over seven million customers and businesses will be able to access their China WeChat payment service, based on projections of Kenya’s current SMEs.

Located in Nairobi, Family Bank has a current customer base of 600,000 account holders (including SMEs) across 92 branches, according to COO Kariuki Kamau.

Prior to the SimbaPay-Family Bank China service, he said a number of Family Bank’s small business customers “were taking cash from our counters and pooling with…informal transmitters” to pay Chinese vendors.

Kariuki Kamau estimates the immediate transactional potential for the new SimbaPay WeChat based service will be $1 million in the first three months.

“The businesses in Kenya import over $4 billion from China, so this could be conservative. We could see this grow 4 to 5 times beyond that when people hear they can send money directly,” said Kariuki Kamau.

On regulation of this new service, he confirmed “Family Bank got the approval of the [Kenyan] Central Bank for SimbaPay to move in the market and…we confirmed with the UK financial regulators that SimbaPay is allowed to do this business.

Headquarted in London, SimbaPay launched in 2015 to facilitate more cost effective and efficient transfer of funds across Africa. The platform works as a gateway payment product “for banks and mobile money providers to offer their customers without having to make any major technical integration” to send funds across Africa’s borders, explained Sagini.

“We’ve created the platform in such a way that we’re able to provide this service like a SaaS B2B service to banks and telcos…and our service is available without internet access,” Sagini said—noting the platform’s USSD capabilities.

The startup has focused more on capturing intra-Africa and out-of-Africa payments volumes, compared to a number of fintech companies with an eye on the multi-billion dollar remittance market for funds sent to Africa from regions such as Europe and North America.

SimbaPay transfers funds to 11 countries—9 in Africa then to China and India. “Early next year we’ll increase this to 29 countries,” said Sagini. This includes offering the WeChat China payment service elsewhere in East Africa.

SimbaPay has raised $1 million in seed funds from TechStars, Barclays Accelerator, and local angel investors, according its CEO.

News Source = techcrunch.com

Quantum computing, not AI, will define our future

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The word “quantum” gained currency in the late 20th century as a descriptor signifying something so significant, it defied the use of common adjectives. For example, a “quantum leap” is a dramatic advancement (also an early ’90’s television series starring Scott Bakula).

At best, that is an imprecise (though entertaining) definition. When “quantum” is applied to “computing,” however, we are indeed entering an era of dramatic advancement.

Quantum computing is technology based on the principles of quantum theory, which explains the nature of energy and matter on the atomic and subatomic level. It relies on the existence of mind-bending quantum-mechanical phenomena, such as superposition and entanglement.

Erwin Schrödinger’s famous 1930’s thought experiment involving a cat that was both dead and alive at the same time was intended to highlight the apparent absurdity of superposition, the principle that quantum systems can exist in multiple states simultaneously until observed or measured. Today quantum computers contain dozens of qubits (quantum bits), which take advantage of that very principle. Each qubit exists in a superposition of zero and one (i.e., has non-zero probabilities to be a zero or a one) until measured. The development of qubits has implications for dealing with massive amounts of data and achieving previously unattainable level of computing efficiency that are the tantalizing potential of quantum computing.

While Schrödinger was thinking about zombie cats, Albert Einstein was observing what he described as “spooky action at a distance,” particles that seemed to be communicating faster than the speed of light. What he was seeing were entangled electrons in action. Entanglement refers to the observation that the state of particles from the same quantum system cannot be described independently of each other. Even when they are separated by great distances, they are still part of the same system. If you measure one particle, the rest seem to know instantly. The current record distance for measuring entangled particles is 1,200 kilometers or about 745.6 miles. Entanglement means that the whole quantum system is greater than the sum of its parts.

If these phenomena make you vaguely uncomfortable so far, perhaps I can assuage that feeling simply by quoting Schrödinger, who purportedly said after his development of quantum theory, “I don’t like it, and I’m sorry I ever had anything to do with it.”

Various parties are taking different approaches to quantum computing, so a single explanation of how it works would be subjective. But one principle may help readers get their arms around the difference between classical computing and quantum computing. Classical computers are binary. That is, they depend on the fact that every bit can exist only in one of two states, either 0 or 1. Schrödinger’s cat merely illustrated that subatomic particles could exhibit innumerable states at the same time. If you envision a sphere, a binary state would be if the “north pole,” say, was 0, and the south pole was 1. In a qubit, the entire sphere can hold innumerable other states and relating those states between qubits enables certain correlations that make quantum computing well-suited for a variety of specific tasks that classical computing cannot accomplish. Creating qubits and maintaining their existence long enough to accomplish quantum computing tasks is an ongoing challenge.

IBM researcher Jerry Chow in the quantum computing lab at IBM’s T.J. Watson Research Center.

Humanizing Quantum Computing

These are just the beginnings of the strange world of quantum mechanics. Personally, I’m enthralled by quantum computing. It fascinates me on many levels, from its technical arcana to its potential applications that could benefit humanity. But a qubit’s worth of witty obfuscation on how quantum computing works will have to suffice for now. Let’s move on to how it will help us create a better world.

Quantum computing’s purpose is to aid and extend the abilities of classical computing. Quantum computers will perform certain tasks much more efficiently than classical computers, providing us with a new tool for specific applications. Quantum computers will not replace their classical counterparts. In fact, quantum computers require classical computer to support their specialized abilities, such as systems optimization.

Quantum computers will be useful in advancing solutions to challenges in diverse fields such as energy, finance, healthcare, aerospace, among others. Their capabilities will help us cure diseases, improve global financial markets, detangle traffic, combat climate change, and more. For instance, quantum computing has the potential to speed up pharmaceutical discovery and development, and to improve the accuracy of the atmospheric models used to track and explain climate change and its adverse effects.

I call this “humanizing” quantum computing, because such a powerful new technology should be used to benefit humanity, or we’re missing the boat.

Intel’s 17-qubit superconducting test chip for quantum computing has unique features for improved connectivity and better electrical and thermo-mechanical performance. (Credit: Intel Corporation)

An Uptick in Investments, Patents, Startups, and more

That’s my inner evangelist speaking. In factual terms, the latest verifiable, global figures for investment and patent applications reflect an uptick in both areas, a trend that’s likely to continue. Going into 2015, non-classified national investments in quantum computing reflected an aggregate global spend of about $1.75 billion USD,according to The Economist. The European Union led with $643 million. The U.S. was the top individual nation with $421 million invested, followed by China ($257 million), Germany ($140 million), Britain ($123 million) and Canada ($117 million). Twenty countries have invested at least $10 million in quantum computing research.

At the same time, according to a patent search enabled by Thomson Innovation, the U.S. led in quantum computing-related patent applications with 295, followed by Canada (79), Japan (78), Great Britain (36), and China (29). The number of patent families related to quantum computing was projected to increase 430 percent by the end of 2017

The upshot is that nations, giant tech firms, universities, and start-ups are exploring quantum computing and its range of potential applications. Some parties (e.g., nation states) are pursuing quantum computing for security and competitive reasons. It’s been said that quantum computers will break current encryption schemes, kill blockchain, and serve other dark purposes.

I reject that proprietary, cutthroat approach. It’s clear to me that quantum computing can serve the greater good through an open-source, collaborative research and development approach that I believe will prevail once wider access to this technology is available. I’m confident crowd-sourcing quantum computing applications for the greater good will win.

If you want to get involved, check out the free tools that the household-name computing giants such as IBM and Google have made available, as well as the open-source offerings out there from giants and start-ups alike. Actual time on a quantum computer is available today, and access opportunities will only expand.

In keeping with my view that proprietary solutions will succumb to open-source, collaborative R&D and universal quantum computing value propositions, allow me to point out that several dozen start-ups in North America alone have jumped into the QC ecosystem along with governments and academia. Names such as Rigetti Computing, D-Wave Systems, 1Qbit Information Technologies, Inc., Quantum Circuits, Inc., QC Ware, Zapata Computing, Inc. may become well-known or they may become subsumed by bigger players, their burn rate – anything is possible in this nascent field.

Developing Quantum Computing Standards

 Another way to get involved is to join the effort to develop quantum computing-related standards. Technical standards ultimately speed the development of a technology, introduce economies of scale, and grow markets. Quantum computer hardware and software development will benefit from a common nomenclature, for instance, and agreed-upon metrics to measure results.

Currently, the IEEE Standards Association Quantum Computing Working Group is developing two standards. One is for quantum computing definitions and nomenclature so we can all speak the same language. The other addresses performance metrics and performance benchmarking to enable measurement of quantum computers’ performance against classical computers and, ultimately, each other.

The need for additional standards will become clear over time.

News Source = techcrunch.com

Security flaw in DJI’s website and apps exposed accounts to hackers and drone live feeds

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It took about six months for popular consumer drone maker DJI to fix a security vulnerability across its website and apps, which if exploited could have given an attacker unfettered access to a drone owner’s account.

The vulnerability, revealed Thursday by researchers at security firm Check Point, would have given an attacker complete access to a DJI users’ cloud stored data, including drone logs, maps, any still or video footage — and live feed footage through FlightHub, the company’s fleet management system — without the user’s knowledge.

Taking advantage of the flaw was surprisingly simple — requiring a victim to click on a specially crafted link. But in practice, Check Point spent considerable time figuring out the precise way to launch a potential attack — and none of them were particularly easy.

For that reason, DJI called the vulnerability “high risk” but “low probability,” given the numerous hoops to jump through first to exploit the flaw.

“Given the popularity of DJI drones, it is important that potentially critical vulnerabilities like this are addressed quickly and effectively,” said Oded Vanunu, Check Point’s head of products vulnerability research.

A victim would have had to click on a malicious link from the DJI Forum, where customers and hobbyists talk about their drones and activities. By stealing the user’s account access token, an attacker could have pivoted to access the user’s main account. Clicking the malicious link would exploit a cross-site scripting (XSS) flaw on the forum, essentially taking the user’s account cookie and using it on DJI’s account login page.

The researchers also found flaws in DJI’s apps and its web-based FlightHub site.

By exploiting the vulnerability, the attacker could take over the victim’s account and gain access to all of their synced recorded flights, drone photos, and more. (Image: Check Point)

Check Point reached out in March, at which time DJI fixed the XSS flaw in its site.

“Since then, we’ve gone product-by-product through all the elements in our hardware and software where the login process could have been compromised, to ensure this is no longer an easily replicable hack,” said DJI spokesperson Adam Lisberg.

But it took the company until September to roll out fixes across its apps and FlightHub.

The good news is that it’s unlikely that anyone independently discovered and exploited any of the vulnerabilities, but both Check Point and DJI concede that it would be difficult to know for sure.

“While no one can ever prove a negative, we have seen no evidence that this vulnerability was ever exploited,” said Lisberg.

DJI heralded fixing the vulnerability as a victory for its bug bounty, which it set up a little over a year ago. Its bug bounty had a rocky start, after the company months later threatened a security researcher, who “walked away from $30,000” after revealing a string of emails from the company purportedly threatened him after finding sensitive access keys for the company’s Amazon Web Services instances.

This time around, there was nothing but praise for the bug finders.

“We applaud the expertise Check Point researchers demonstrated through the responsible disclosure of a potentially critical vulnerability,” DJI’s North America chief Mario Rebello said.

Good to see things have changed.

News Source = techcrunch.com

Chinese investment into computer vision technology and AR surges as U.S. funding dries up

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Last year 30 leading venture investors told us about a fundamental shift from early stage North American VR investment to later stage Chinese computer vision/AR investment — but they didn’t anticipate its ferocity.

Digi-Capital’s AR/VR/XR Analytics Platform showed Chinese investments into computer vision and augmented reality technologies surging to $3.9 billion in the last 12 months, while North American augmented and virtual reality investment fell from nearly $1.5 billion in the fourth quarter of 2017 to less than $120 million in the third quarter of 2018. At the same time, VC sentiment on virtual reality softened significantly.

What a difference a year makes.

Dealflow (dollars)

What VCs said a year ago

When we spoke to venture capitalists least year, they had some pretty strong opinions.

Mobile augmented reality and Computer Vision/Machine Learning (“CV/ML”) are at opposite ends of the spectrum — one delivering new user experiences and user interfaces and the other powering a broad range of new applications (not just mobile augmented reality).

The market for mobile AR is very early stage, and could see $50 to $100 million exits in 2018/2019. Dominant companies will take time to emerge, and it will also take time for developers to learn what works and for consumers and businesses to adopt mobile AR at scale (note: Digi-Capital’s base case is mobile AR revenue won’t really take off until 2019, despite 900 million installed base by Q4 2018). Tech investors are most interested in native mobile AR with critical use cases, not ports from other platforms.

Computer vision and visual machine learning is more advanced than mobile AR, and could see dominant companies in the near-term. Here, investors love  startups with real-world solutions that are challenging established industries and business practices, not research projects. Firms are investing in more than 20 different mobile augmented reality and computer vision and visual machine learning sectors, but there is the potential for overfunding during the earliest stages of the market.

What VCs did in the last 12 months

Perhaps the most crucial observation is the declining deal volumes over the last year.

Deal Volume (number of deals by category)

(Source: Digi-Capital AR/VR/XR Analytics Platform)

Deal volume (the number of deals) declined steadily by 10% per quarter over the last 12 months, and was around two-thirds the level in Q3 2018 that it was in Q4 2017. Most of the decline happened in the US and Europe, where VCs increasingly stayed on the sidelines by looking for short-term traction as a sign of long-term growth. (Note: data normalized excluding HTC ViveX accelerator Q4 2017, which skews the data)

Deal Volume (number of deals by stage)

The biggest casualties of this short-termist approach have been early stage startups raising seed (deal volume down by more than half) and some series A (deal volume down by a quarter) rounds. This trend has been strongest in North America and Europe, but even Asia has not been entirely immune from some early stage deal volume decline.

Deal Value (dollars)

(Source: Digi-Capital AR/VR/XR Analytics Platform)

While deal volume is a great indicator of early-stage investment market trends, deal value (dollars invested) gives a clearer picture of where the big money has been going over the last 12 months. (Note: investment means new VC money into startups, not internal corporate investment – which is a cost). Global investment hit its previous quarterly record over $2 billion in Q4 2017, driven by a few very large deals. It then dropped back to around $1 billion in the first quarter of this year. Since then deal value has steadily climbed quarter-on-quarter, to reach a new record high well over $2 billion in Q3 2018.

Over $4 billion of the total $7.2 billion in the last 12 months was invested in computer vision/AR tech, with well over $1 billion going into smartglasses (the bulk of that into Magic Leap) . The next largest sectors were games around $400 million and advertising/marketing at a quarter of a billion dollars. The remaining 22 industry sectors raised in the low hundreds of millions of dollars down to single digit millions in the last 12 months.

A tale of two markets

Deals by Country and Category (dollars)

American and Chinese investment had an inverse relationship in the last 12 months. American investors increasingly chose to stay on the sidelines, while Chinese investor confidence grew to back up clear vision with long-term investments. The differences in the data couldn’t be more stark.

North American Deals (dollars)

North American investment was almost triple Asian investment in Q4 2017, with a record high of nearly $1.5 billion dollars for the quarter. Despite 2018 being a transitional year for the market (Digi-Capital forecast that market revenue was unlikely to accelerate until 2019), North American quarterly investment fell over 90% to less than $120 million in Q3 2018. American VCs appear to have taken a long-term solution to a short-term problem.

China Deals (dollars)

Meanwhile, Chinese VCs have been focused on the long-term potential of the intersection between computer vision and augmented reality, with later-stage Series C and Series D rounds raising hundreds of millions of dollars a time. This trend increased dramatically in the last 12 months, with SenseTime Group raising over $2 billion in multiple rounds and Megvii close behind at over $1 billion (also multiple rounds).

Smaller investments (by Chinese standards) in the hundreds of millions have gone into companies Westerners might not know, including Beijing Moviebook Technology, Kujiale and more. All this saw Chinese quarterly investment grow 3x in the last 12 months. (Note: some recent Western opinions about market investment trends were based on incomplete data)

Where to from here?

With our team’s investment banking background, experience shows that forecasting venture capital investment is a fool’s errand. Yet it is equally foolish to ignore hard data, and ongoing discussions with leading investors along Sand Hill Road and China indicate some trends to watch.

American tech investors might continue to wait for market traction before providing the fuel needed for that traction (even if that seems counterintuitive). While this could pose an existential threat to some early stage startups in North America, it’s also an opportunity for smart money with longer time horizons.

Conversely, Chinese VCs continue to back domestic companies which could dominate the future of computer vision/augmented reality. The next 6 months will determine if this is a long-term trend, but it is the current mental model.

If mobile AR revenue accelerates in 2019 as critical use cases and apps emerge (as in Digi-Capital’s base case), this could become a catalyst for renewed investment by American VCs. The big unknown is whether Apple enters the smartphone tethered smartglasses market in late 2020 (as Digi-Capital has forecast for the last few years). This could be the tipping point for the market as a whole (not just investment). However, Apple timing is hard to predict (because Apple), with any potential launch date known only to Tim Cook and his immediate circle.

Steve Jobs said, “You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something – your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.”

Chinese investors embraced a Jobsian approach over the last 12 months, with Western VCs increasingly dot-connecting (or not). It will be interesting to see how this plays out for computer vision/AR investment over the next 12 months, so watch this space.

News Source = techcrunch.com

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