April 22, 2019
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Startups Weekly: Zoom CEO says its stock price is ‘too high’

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When Zoom hit the public markets Thursday, its IPO pop, a whopping 81 percent, floored everyone, including its own chief executive officer, Eric Yuan.

Yuan became a billionaire this week when his video conferencing business went public. He told Bloomberg that he actually wished his stock hadn’t soared quite so high. I’m guessing his modesty and laser focus attracted Wall Street to his stock; well, that, and the fact that his business is actually profitable. He is, this week proved, not your average tech CEO.

I chatted with him briefly on listing day. Here’s what he had to say.

“I think the future is so bright and the stock price will follow our execution. Our philosophy remains the same even now that we’ve become a public company. The philosophy, first of all, is you have to focus on execution, but how do you do that? For me as a CEO, my number one role is to make sure Zoom customers are happy. Our market is growing and if our customers are happy they are going to pay for our service. I don’t think anything will change after the IPO. We will probably have a much better brand because we are a public company now, it’s a new milestone.”

“The dream is coming true,” he added. 

For the most part, it sounded like Yuan just wants to get back to work.

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IPO corner

You thought I was done with IPO talk? No, definitely not:

  • Pinterest completed its IPO this week too! Here’s the TLDR: Pinterest popped 25 percent on its debut Thursday and is currently trading up 28 percent. Not bad, Pinterest, not bad.
  • Fastly, a startup I’d admittedly never heard of until this week, filed its S-1 and displayed a nice path to profitability. That means the parade of tech IPOs is far from over.
  • Uber… Surprisingly, no Uber IPO news this week. Sit tight, more is surely coming.

$1B for self-driving cars

While I’m on the subject of Uber, the company’s autonomous vehicles unit did, in fact, raise $1 billion, a piece of news that had been previously reported but was confirmed this week. With funding from Toyota, Denso and SoftBank’s Vision Fund, Uber will spin-out its self-driving car unit, called Uber’s Advanced Technologies Group. The deal values ATG at $7.25 billion.


The TechCrunch staff traveled to Berkeley this week for a day-long conference on robotics and artificial intelligence. The highlight? Boston Dynamics CEO Marc Raibert debuted the production version of their buzzworthy electric robot. As we noted last year, the company plans to produce around 100 models of the robot in 2019. Raibert said the company is aiming to start production in July or August. There are robots coming off the assembly line now, but they are betas being used for testing, and the company is still doing redesigns. Pricing details will be announced this summer.

Digital health investment is down

Despite notable rounds for digital health businesses like Ro, known for its direct-to-consumer erectile dysfunction medications, investment in the digital health space is actually down, reports TechCrunch’s Jonathan Shieber. Venture investors, private equity and corporations funneled $2 billion into digital health startups in the first quarter of 2019, down 19 percent from the nearly $2.5 billion invested a year ago. There were also 38 fewer deals done in the first quarter this year than last year, when investors backed 187 early-stage digital health companies, according to data from Mercom Capital Group.

Startup capital

Byton loses co-founder and former CEO, reported $500M Series C to close this summer
Lyric raises $160M from VCs, Airbnb
Brex, the credit card for startups, raises $100M debt round
Ro, a D2C online pharmacy, reaches $500M valuation
Logistics startup Zencargo gets $20M to take on the business of freight forwarding
Co-Star raises $5M to bring its astrology app to Android
Y Combinator grad Fuzzbuzz lands $2.7M seed round to deliver fuzzing as a service

Extra Crunch

Hundreds of billions of dollars in venture capital went into tech startups last year, topping off huge growth this decade. VCs are reviewing more pitch decks than ever, as more people build companies and try to get a slice of the funding opportunities. So how do you do that in such a competitive landscape? Storytelling. Read contributor’s Russ Heddleston’s latest for Extra Crunch: Data tells us that investors love a good story.

Plus: The different playbook of D2C brands

And finally, for the first of a new series on VC-backed exits aptly called The Exit. TechCrunch’s Lucas Matney spoke to Bessemer Venture Partners’ Adam Fisher about Dynamic Yield’s $300M exit to McDonald’s.


If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm and I chat about rounds for Brex, Ro and Kindbody, plus special guest Danny Crichton joined us to discuss the latest in the chip and sensor world.

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Ford to offer hybrid and electric options in redesigned 2020 Escape SUV

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Ford today is taking the wraps off the latest generation of the Escape . It’s a major re-work inside and out with new sheetmetal and powertrain options. The 2020 Escape is sportier, loaded with technology, and with hybrid and electric options, clearly built for the future.

The Escape has been Ford’s most affordable SUV since its debut in 2000. Smaller than the stalwart Explorer and more traditional than the Edge or Flex, Ford has always positioned the Escape as an easy and accessible sport utility vehicle. The upcoming version carries on that tradition while offering buyers new options.

The 2020 Escape comes in several variants. The base model sports a 1.5L EcoBoost engine or buyers can step up to a 2.0L EcoBoost. Ford is also offering the Escape in a traditional hybrid configuration and, for the first time, a plug-in hybrid setup. But buyers will have to wait for the plug-in version. This trim level will hit dealers next spring while the rest of the line will be available this fall.

Pricing hasn’t been released yet. The current Escape retails between $25k and $30k.

The driving range is competitive. Ford says the front-rear drive Escape equipped with the standard hybrid has an EPA-estimated range of 550 miles. The plug-in hybrid is expected to get 30 miles of range while just on electric while its 11 gallon fuel tank ensures it can still travel over 400 miles before needing a pitstop.

This is the second Escape generation offered in a hybrid setup but the first with a plug-in variant. Ford sold 114,000 hybrid Escapes between 2004 and 2012, but dropped the option for the current model line that debuted in 2012.

Ford has lofty ambitions for hybrid models. In 2018 the automaker stated it was going all-in on hybrid SUVs while stepping back from traditional cars. By 2020, Ford aims to have high-performance SUVs in market, including five with hybrid powertrains and one fully battery electric model. This includes the 2020 Ford Explorer Hybrid that should hit dealers this summer, and two entirely new off-road SUVs, including a new Bronco, and a small SUV that has yet to be named. There’s also that “performance battery electric utility” that will make up part of its overall SUV lineup, which is set for a 2020 release and will spearhead a plan to release six electric vehicle models by 2022. To help support this effort, the automaker/a> to add more production capacity at a second U.S. factory for its next-generation battery-electric vehicle program.

The Escape is available in either front-wheel drive or all-wheel drive configurations. At this time, though, the plug-in hybrid will only be offered with front-wheel drive while models equipped with the 250 HP 2.0L EcoBoost will only come paired with all-wheel drive.

Ford says the new Escape has best-in-class second-row legroom with a sliding backseat. While it steals a bit storage, this feature should make the backseat a bit more comfortable for passengers. Sadly, this option is only available in models feature gas engines. In the hybrid models, the battery pack lives under the rear seat, which prevents the seat from sliding — even still, by placing the battery under the seat, it doesn’t consume valuable storage space in the rear of the vehicle.

Ford made sure the Escape is equipped with a good assortment of standard and optional driver assist features. The standard suite includes Ford’s so-called Co-Pilot360 which includes automatic emergency breaking, rear view camera, andblind spot monitoring system. Other systems are options: parking assist, heads-up display, and adaptive cruise control.

An 8-inch touch screen is standard on SE models and features Ford’s Sync 3 system.

The outgoing Escape was in a need for an overhaul. Compared to its most direct competitors, car reviews often state the current Ford Edge falls short. Most reviews point to options like the Honda CR-V, Toyota RAV-4 and Mazda CX-5, stating they give drivers roomier cabins and offer lively powertrains. Ford released the third generation Escape in 2012 and updated the exterior in 2017 as sales were starting to falter.

Ford has big plans for its SUVs. In early 2018 it announced it was canceling production of all of its sedans leaving the Mustang as the only traditional car it sold in North America. The auto maker would instead turn to crossovers and SUVs to take the place of the Fusion, Taurus, Fiesta and Focus. Sales of traditional cars have been declining for years and Ford clearly felt it needed to embrace the latest trend by offering what most buyers want.

The 2020 Ford Escape is a notable leap forward for Ford’s smallest SUV. With the new hybrid options and larger interior, it should resonate well with shoppers looking for an eco-friendly people mover.

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BeliMobilGue raises $10M for its used-car sales platform in Indonesia

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BeliMobilGue, a used car sales platform in Indonesia, has fueled up with a $10 million Series round for the race to dominate the automotive market in Southeast Asia’s largest economy.

The company was started in 2017 as a joint venture between Europe’s Frontier Car Group (FCG) and Intudo Ventures, a VC firm focused on Indonesia. BeliMobilGue said today that the capital came from FCG and new investors, which include Tunas Toyota — the authorized dealership for Toyota cars in Indonesia.

It’s worth noting that FCG itself is a venture which, as the name sounds, develops on automotive ventures in emerging (frontier) markets in Latin America, Asia and Africa. Its investors include Naspers/OLX, Balderton Capital, TPG Growth and Partech Ventures.

This Series A round follows a $3.7 million round last year for BeliMobilGue — which means ‘buy my car’ in Indonesia’s Bahasa language.

BeliMobilGue is aimed at making it easy for car owners to sell their vehicle.

The first step is an online price estimation for vehicle. If the owner is happy with the valuation, BeliMobilGue takes the vehicles in and, after a one hour check attended in person by its testers, it arranges a sale to its network of over 1,000 dealers and private buyers. The entire process is targeted at one hour and is free for consumers, BeliMobilGue CEO Rolf Monteiro told TechCrunch.

The company has 30 physical testing points across Jakarta, Indonesia’s capital city, and with this money in the bank it is targeting expansion to Java. By the end of this year, Monteiro forecasts that the number of physical stations will have passed 100.

Another target for this year is ancillary services. BeliMobilGue is focused on enabling dealers, many of whom are often small businesses rather than nationwide chains, to growth with its service so it is offering financial packages financed by a third-party bank.

“The difference between small and large dealerships is their access to capital,” Monteiro explained in an interview. “We are a little bit more comfortable [than a bank] to extend their finance because we’re not just using data, we’re sitting on that dealer relationship.

“Plus we are sitting on cars, so we are financing cars that come from our platform and [if necessary] we can help offload the car for the dealer,” he added.

BeliMobilGue aims to sell vehicles within an hour, that includes a comprehensive inspection that’s carried out by its staff and covers 300 points.

BeliMobilGue is far from alone in going after Indonesia, which is the world’s fourth most populous country and the cornerstone of most digital strategies for the region. An annual report from Google and Temasek forecasts that Indonesia’s online economy will grow to $100 billion by 2025 from $8 billion in 2015. Southeast Asia as a whole is predicted to reach $240 billion, which is telling of the significance of Indonesia.

With that in mind, regional rivals have doubled down on Indonesia.

Carro has raised $78 million to date — including a $60 million Series B last year — while Carsome has $27 million and iCar Asia, from venture builder Catcha, has pulled in $39 million to date.

Each of that trio serves multiple markets across the region, not Indonesia exclusively, which is where Monteiro believes he can find an advantage. While he admitted that BeliMobilGue could have raised more money — it stuck to finding ‘smart money’ over amassing pools of cash, he said — he sees the existance of competition as win-win for the industry.

“Indonesia is a massive market,” he said. “Whether it is us, Carro or Carsome, the competition helps educate the market and it will get us new business. But, as much as I welcome them, I want that dominant position.”

Adding strategic investors like Tunas Toyota is, Monteiro believes another key differentiator.

“An investor like Tunas has 25-30 years of experience, so, for us, this partnership is golden. We’re quite content with the round and how it played out,” he said.

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SoftBank’s Vision Fund is preparing to invest $1 billion in Grab

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SoftBank’s Vision Fund is set to continue its recent spree of investments in Asian tech unicorns. The mega fund — which is targeted at $100 billion — is planning to invest upwards of $1 billion into Southeast Asia’s ride-hailing leader Grab, two sources with knowledge of the plan told TechCrunch. The investment could reach as much as $1.5 billion, one source added.

A SoftBank representative did not respond to a request for comment. Grab declined to comment.

The Vision Fund has made significant investments in three billion-dollar Asian companies in recent months. That includes backing India’s OYO as part of a $1 billion round (which included money from Grab) in September, writing a $2 billion check for Korea’s Coupang in November and co-leading a $1.2 billion round for Tokopedia in Indonesia alongside Alibaba earlier this month.

There is a pattern that SoftBank appears to be following here.

In all three cases, the Japanese company was an existing investor and, having transferred its stakes to the Vision Fund, it then doubled down and invested again via the Vision Fund itself. That’s also the plan for this Grab deal, TechCrunch understands.

SoftBank’s most recent financial report, filed in November, explains that it plans to move its stakes in ride-hailing firms Uber, China’s Didi, India’s Ola and Grab over to the Vision Fund. But that hasn’t happened yet and it isn’t clear when it will.

“The Company expects that the necessary procedures will be made in the future to obtain applicable consent from limited partners of the Fund and regulatory approvals for the transfer,” it explained in the report, which doesn’t include a projected timeframe.

One source told TechCrunch that the investment in Grab is contingent on that equity transfer being made, as was the case with Tokopedia and Coupang, which saw SoftBank-owned stakes transferred to the fund in Q3 of this year.

Grab CEO and co-founder Anthony Tan [Photographer: Ore Huiying/Bloomberg/Getty Images]

While we don’t know how long that wait will be, Grab is hardly short on cash. The Singapore-based company is putting the final touches to its Series H fund which is focused on raising a total of $3 billion. It has already received significant contributions from Toyota, Microsoft, Yamaha Motors, Booking Holdings and a range of institutional investors.

Grab operates across eight markets in Southeast Asia, where it claims over 130 million downloads and more than 2.5 billion completed rides to date. The company acquired Uber’s business earlier this year in a deal that saw the U.S. company pick up a 27.5 percent stake in Grab and turn their rivalry into a partnership. The merger deal, however, was criticized by regulators and, in Singapore, the pair were fined a total of $9.5 million for violating anti-competition laws.

Grab is Southeast Asia’s highest-valued tech startup, having commanded an $11 billion valuation through this Series H round. It isn’t clear how much that figure will increase if, as and when this Vision Fund investment closes. The company has raised around $6.8 billion to date from investors, according to data from Crunchbase.

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Grab is messing up the world’s largest mapping community’s data in Southeast Asia

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Grab, Southeast Asia’s top ride-hailing company, has hit a roadblock in its efforts to improve its mapping and routing service after running into trouble with OpenStreetMap, the world’s largest collaborative mapping community, through a series of blundering edits in Thailand.

Grab, which gobbled up Uber’s local business in exchange for an equity swap earlier this year, has busily added details and upgraded the maps it uses across its eight markets in Southeast Asia.

Accurate maps are, of course, essential to a smooth ride-hailing experience for Grab’s 125 million registered users. Without accurate location details, ensuring that drivers and passengers can easily rendezvous becomes nearly impossible.

Grab’s effort to improve the never-ending quest of more accurate maps involves a multi-input approach that uses Google Maps as the base with Grab adding in its own information — ‘points of interest’ cultivated through customer feedback and groundwork — and other public or licensed information.

However, what appears to be a focus on speed has seen it suspend all activities in Thailand — Southeast Asa’s second-largest economy — after it was found to have overwritten data developed by OpenStreetMap (OSM) with inaccurate edits that were created by a remote team based in India.

Established in 2006, OSM’s mission is to “make the best map data set of the world” and it makes its data, which is developed by over two million volunteers from across the world, available for use without charge.

Outsourced errors

An India-based team from GlobalLogic, an outsourced software firm contracted by Grab, made dozens of edits in recent months that overwrote information created by OSM members, who voluntarily map streets by visiting them in person. Grab suspended work in Thailand by the GlobalLogic team after OSM members complained about numerous incorrect edits in OSM forum posts.

Unlike the hobbyist mappers who collect data in person, the Grab contractors used satellite imagery to ‘correct’ local map details in Thailand which, in fast-changing cities like Bangkok, meant that their work was incorrect because it relied on out-of-date sources. One mapper, so exasperating at the continued flow of inaccurate updates, began labeling correcting summaries with #WhatInGrabsNameIsThis to document the trail. More than 30 edits included the hashtag, but countless others may not have been found yet.

“Open Street Maps, for the most part, is craftsmanship but they are coming at this with an industrial mindset,” Mishari Muqbil, a Bangkok-based OSM member, told TechCrunch.

Muqbil, who previously arranged and managed a workshop to help local Grab staff and volunteers working on maps in Thailand understand how OSM works, said he spent “hours” fixing road edits in his neighborhood which had been incorrectly changed.

“God knows what they’ve been doing in other places,” he added.

Grab claims over 150 million registered users and 2.5 billion rides completed to date

The problems came to a head in November when the Open Street Map Foundation’s board of directors rejected membership requests for “more than 100 applicants” from GlobalLogic, thereby restricting the number of outsourced representatives working on maps for Grab and other clients of the agency.

“There had been a mass sign-up of 100 new accounts on 15.11.2018 from India, most coming from one single IP address from a company “well known” to OpenStreetMap. There had been a larger amount of complaints regarding edits from that company, who provide “mapping services” to other companies,” read a circular issued by the board.

The incident was the most significant membership rejection spree from OSM since 2011, the board said.

Attribution concerns

Beyond making incorrect edits using a remote team, Grab — which is finalizing a $3 billion funding round from the likes Toyota and SoftBank, and has raised $6.8 billion to date — appears to be using OSM data without proper attribution.

In a phone interview, Ajay Bulusu — head of regional operations at Grab — confirmed that the company uses OSM data but he told TechCrunch that it is not consumer-facing within Grab’s app. Instead, he explained, Grab uses the information for some internal algorithms, routing and estimated time of arrival data. Bulusu — a former Googler who joined Grab last year — explained that the company uses a combination of information, including OSM data in some places where needed.

Grab, however, does use OSM data in consumer terms as a blog post from Muqbil explains. There are some parts of Bangkok where the ride-hailing app routes a ride through roads that are not shown within the Google Map overlay that it uses to display locations. Muqbil previously claimed Uber did the same.

A screenshot from the Grab app [left] appears to show that it uses information from OSM maps [right] to route rides beyond the roads displayed in Google Maps in some parts of Bangkok (Credit: Mishari Muqbil)

While it may be true that Grab doesn’t use all of OSM’s data in its consumer product — it uses a lot of its own information, including GPS pings from previous journeys — the fact that it integrates any portion of the organization’s data in its service means it should include credit. Grab’s app currently displays no credit which violates OSM’s license agreement.

When presented with two examples that appeared to show a use of OSM data, Grab backtracked and confirmed that it does use some of the organization’s data within its consumer-facing apps.

Grab’s statement (below) doesn’t say that the company will add attribution to its map, per OSM policy, instead the company suggested that it will update an OSM wiki page it operates.

We have always been open and transparent about the partners we work with and the sources of our data. We are actively working to find the best way to acknowledge all sources within the app itself. With regards to OSM specifically, we outline our partnership here: We are also updating the Grab OSM Wiki page with more details of our partnership. Grab and the OSM community have worked closely together across many Southeast Asian cities – we share the same goal, which is to map SEA better for the common good. It’s been a very positive relationship by and large and one that we are excited to keep expanding.

It may sound trivial to some, but mapping information is a crucial differentiator that is much sought-after by the world’s billion-dollar ride-hailing companies.

Indeed, Grab’s failure to comply with OSM’s policy comes barely a week after it was reported that Go-Jek — its Indonesia-based rival that’s backed by Tencent, Google and others — had copied Grab’s map data, specifically its points of interest, in Singapore as part of its recent expansion into the country.

Bulusu refused to be drawn into commenting on the reports, claiming that he “doesn’t know” if Go-Jek did scrape Grab’s data.

A Go-Jek spokesperson did not reply to a request for comment.

CEO Anthony Tan has consistently positioned Grab as Southeast Asia’s “local champion”

Developing local relationships

Grab has indicated its intention to work more closely with the OSM community in Thailand. A recent report from Quartz shone a light on the work it is doing in Southeast Asia, particularly in Indonesia, where it collaborates with HOT, Humanitarian OSM Team, a non-profit that spun out of the OSM movement which specializing in mapping for disaster relief.

Bulusu said he plans to meet with Thailand’s OSM community while he admitted that the company must do better.

“We apologize to the Thai OSM community,” he said. “We’re planning to build a process [and are] trying to have an open discussion with the Thailand forum.”

As part of that bridge-building effort, Bulusu himself has committed to meeting with OSM members face-to-face in Thailand. A meeting at Grab’s office in Bangkok is in the planning, although the Grab exec has not yet committed to a request to meet in Chiang Mai, where a substantial number of community members are located.

“We totally understand the Thailand sentiment and we’ve stopped mapping to make sure we do the right thing,” Bulusu added. “Across the region, we’ve done a lot of good work on OSM and we want to continue that… if people reach out, we want to work with them.”

It’s certainly ironic that Grab, which CEO Anthony Tan continually positioned as the “local champion” during its battle with Uber and has raised more money than any startup in Southeast Asia, has resorted to outsourcing elements of its mapping to India and, in doing so, harmed the local champions developing maps that are designed to help improve services for all.

Bulusu, however, defended Grab’s use of GlobalLogic. He said that Hyderabad, where the GlobalLogic team working with Grab is based, “is where most global mapping talent is based.” He said usage of the agency was “complementary to local teams” and, while he acknowledged that there could be errors, he again reiterated that Grab is keen to establish a system of working with Thailand’s OSM community.

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