Posted on

Stark raises $1.5M for a toolkit that helps developers and others create more inclusive design

Diversity and inclusion are slowly, slowly moving away from being an afterthought (or worse, a no-thought) in the tech world. And to underscore the new attention the area is getting — in every aspect of the concept — today a startup that’s building tools to help designers and developers make their end products more accessible to people with visual impairments is announcing some funding.

Stark, a New York-based startup that lets designers others building with design software run their files through an integrated tool that checks it and provides color edits and other suggestions to help them meet guidelines for people who see less well, has picked up $1.5 million.

Stark plans to use the funding to continue building integrations into commonly-used design apps and create integrations for developers (where it will read and provide guidance on code: next up is a Github integration), and continue building out its business with expanded pricing and usage tiers.

Currently, users can use plugins of Stark on Figma, Sketch & Adobe XD that let them access a Contrast Checker, Smart Color Suggestions, 8 Colorblind Simulations, a Colorblind Generator, and Rapid Contrast Checking (on Adobe XD).

Longer term, the plan is to build and end-to-end platform and to address inclusivity for other kinds of needs beyond visual impairments, and, since accessibility can come in physical forms, too, to consider more than just software, and to create more ways to automatically correct details.

As Cat Noone — the now-European-based CEO who co-founded the company with Michael Fouquet (the team is working remotely, she said) — describes it, the ambition is to “become the Grammarly for accessibility in software.”

The funding, a pre-seed round, is coming from a wide and interesting group of backers. It was led by Daniel Darling and Pascal Unger from Darling Ventures, with participation also from Jason Warner, the CTO of Github; Indicator Ventures; Kleiner Perkins’ Scout Fund; and Basecamp Ventures. Individual backers include the product lead for accessibility at Atlassian, the director of equitable design & impact at Culture Amp, a director of design at DuckDuckGo, a former VP of software development at Oracle, and more.

Part of the reason that Stark has gotten attention from all of these investors is because of its traction.

Early versions of the software have been out for eight months now, in the form of the plugins for Sketch, Adobe XD and Figma, and in that time it’s clocked up 300,000 users, mostly designers, engineers, and product managers across those three design platforms, with current customers including people from Microsoft, Oscar Health, US Bank, Instagram, Pfizer, Volkswagen, Dropbox and more.

It also has 10,000 people in its “community”, which includes people engaging with Stark more directly (rather than just using its plugins), on platforms like Slack, getting its newsletter and more.

Diversity and inclusion have been in the headlines this year, which is good news, even if the reason for it has been not so good — the sorry state of how minorities are treated by law enforcement. Partly because of the profile of those incidents and the subsequent protests, much of the world has associated the concept of D&I very closely with racial inclusion. While that story continues to unfold (and we hopefully continue see more positive and sustained efforts to address it), the kind of diversity and inclusion Stark is addressing is of a different sort.

It’s a logical, if often overlooked area: The Centers for Disease Control and Prevention estimate that (as of 2018) around one in every four adults in the U.S. alone live with some form of disability (a figure that doesn’t count children), with the biggest of these being cognitive disabilities. This essentially means that while a lot of design (and tech in general) is not really built to address this wider group, it’s a very sizable market.

At a time when technology is regularly made out to be the bad guy — and the reasons are many, touching on mental health; physical health; and economic, environmental, civil and legal impacts — designing software and hardware that is more inclusive could go a very long way in bridging some of those gaps that tech has created with (and within) society.

“We’re talking about the largest minority group in the U.S.,” Noone said. “You wouldn’t build a building today without a wheelchair ramp, so why aren’t we accounting for those individuals in our software design?”

Noone said that she and Fouquet originally landed on the idea of Stark when they were doing some work for another firm, building an emergency services app that would get used by the elderly. They built a very early version of the tool for themselves to use in that work. Showing it to others, they found people asking if they could use it, too. “And then it just kind of snowballed,” she said.

She then said that she found herself going down a “rabbit hole into the world of design and accessibility” and realised that not only were there no tools really built to address this out there, but that there was “so much more to the problem than colors.” (Colors was where Stark started, hence the great name.)

There is an interesting stick and carrot in the bigger market with things like inclusive design: for some it might be an issue of having to comply, others simply believe it’s the right thing to do, while yet others may not care but (rather cynically) believe being inclusive is a good look. Whatever the motivation is, the trick with Stark is that it’s making it easy to be inclusive for more people, and lowering the barrier at the end of the day can only be a good thing.

“No software product should exclude a disadvantaged minority of their users. It’s bad for business and bad for society,” said Darling in a statement. “We’re seeing dramatic increasing awareness amongst software designers, developers and executives to ship products that are universally accessible. Stark has quickly earned the trust of the industry and is on a path to become an important part of software infrastructure. We’re thrilled to partner with such a mission driven company that is already improving how software is produced around the world.”​

Read More

Posted on

Tencent leads $100M Series B funding round into China-based esport provider VSPN

Further confirmation that the esports market is booming amid the pandemic comes today with the news that esports ‘total solutions provider’ VSPN (Versus Programming Network) has raised what it describes as ‘close to’ $100 million in a Series B funding round, led by Tencent Holdings . Other investors that participated in the round include Tiantu Capital, SIG (Susquehanna International Group), and Kuaishou. The funding round will go towards improving esports products and its ecosystem in China and across Asia.

Founded in 2016 and headquartered in Shanghai, VSPN was one of the early pioneers in esports tournament organization and content creation out of Asia. It has since expanded into other businesses including offline venue operation.

In a statement, Dino Ying, CEO of VSPN (see also our exclusive interview) said: “We are delighted to announce this latest round of funding. Thanks to policies supporting Shanghai as the global center for esports, and with Beijing, Chengdu, and Xi’an expressing confidence in the development of esports, VSPN has grown rapidly in recent years. After this funding round, we look forward to building an esports research institute, an esports culture park, and further expanding globally. VSPN has a long-term vision and is dedicated to the sustainable development of the global esports ecosystem.”

Dino Ying, VSPN CEO

Mars Hou, general manager of Tencent Esports, commented: “VSPN’s long-term company vision and leading position in esports production are vital for Tencent to optimize the layout of the esports industry’s development.”

We had a hint that Tencent might invest in VSPN when, in March this year, Mark Ren, COO of Tencent Holdings, made a public statement that Tencent would provide more high-quality esports competitions in conjunction with tournament organizers like VSPN.

As we observed in August, Tencent, already the world’s biggest games publisher, that it would consolidate Douyu and Huya, the previously competing live-streaming sites focused on video games.

In other words, Tencent’s investment into VSPN shows it is once again doubling-down on the esports market.

This Series B funding round comes four years after VSPN’s 2016 Series A funding round, which was led by Focus Media Network, joined by China Jianteng Sports Industry Fund, Guangdian Capital, and Averest Capital.

Now, VSPN has become the principal tournament organizer and broadcaster for PUBG MOBILE international competitions, and China’s top competitions for Honor of Kings, PUBG, Peacekeeper Elite, CrossFire, FIFA, QQ Speed, and Clash Royale. This will tally-up 12,000 hours of original content. The company has partnered with over 70% of China’s esports tournaments.

In March, another huge esports player, ESL, joined forces with Tencent to become a part of the PUBG Mobile esports circuit for 2020.

In addition to its core esports tournament and content production business, VSPN has branded esports venues in Chengdu, Xi’an, and Shanghai. In May, VSPN launched its first overseas venue, V. SPACE in Seoul, South Korea.

And even offline events are coming back. VSPN hosted the first large-scale esport event with offline audiences in August this year. And the LOL S10 event will open 6,000 tickets. However, all tournaments will operate under strict COVID-19 prevention measures and approval processes by the Chinese government, and not all esports events are allowing offline audiences. In the main, only high-level ones are approved.

VSPN said it will continue to focus on building an esports short-form video ecosystem, improving the quality of esports content creation, and reaching more users via different channels. VSPN currently houses more than 1,000 employees in five business divisions.

Read More

Posted on

Week in Review: Snapchat strikes back

Hello hello, and welcome back to Week in Review. Last week, I wrote about the possibility of a pending social media detente, this week I’m talking about a rising threat to Facebook’s biz.

If you’re reading this on the TechCrunch site, you can get this in your inbox here, and follow my tweets here. And while I have you, my colleague Megan Rose Dickey officially launched her new TechCrunch newsletter, Human Capital! It covers labor and diversity and inclusion in tech, go subscribe!


Image: TechCrunch

First off, let me tell you how hard it was to resist writing about Quibi this week, but those takes came in very hot the second that news dropped, and I wrote a little bit about it here already. All I will say, is that while Quibi had its own unique mobile problems, unless Apple changes course or dumps a ton of money buying up content to fill its back library, I think TV+ is next on the chopping block.

This week, I’m digging into another once-maligned startup, though this one has activated quite the turnaround in the last two years. Snap, maker of Snapchat, delivered a killer earnings report this week and as a result, investors deemed to send the stock price soaring. Its market cap has nearly doubled since the start of September and it’s clear that Wall Street actually believes that Snap could meaningfully increase its footprint and challenge Facebook.

The company ended the week with a market cap just short of $65 billion, still a far cry from Facebook $811 billion, but looking quite a bit better than it was in early 2019 when it was worth about one-tenth of what it is today. All of a sudden, Snap has a new challenge, living up to high expectations.

The company shared that in Q3, it delivered $679 million in reported revenue, representing 52% year-over-year growth. The company currently has 249 million daily active users, up 4% over last quarter.

Facebook will report its Q3 earnings next week, but they’re still in a different ballpark for the time being, even if their market cap is just around 12 times Snap’s, their quarterly revenue from Q2 was about 28 times higher than what Snap just reported. Meanwhile, Facebook has 1.79 billion daily actives, just about 7 times Snapchat’s numbers.

Snap has spent an awful lot of time proving the worth of features they’ve been pushing for years, but the company’s next challenge might be diversifying their future. The company has been flirting with augmented reality for years, waiting patiently for the right moment to expand its scope, but Snap hasn’t had the luxury of diverting resources away from efforts that don’t send users back to its core product. Some of its biggest launches of 2020 have been embeddable mini apps for things like ordering movie tickets or bite-sized social games that bring even more social opportunities into chat.

Snap’s laser focus here has obviously been a big part of its recovery, but as expectations grow, so will demands that the company moves more boldly into extending its empire. I don’t think Snapchat needs to buy Trader Joe’s or its own ISP quite yet, but working towards finding its next platform will prevent the service from settling for Twitter-sized ambitions and give them a chance at finding a more expansive future.


Image Credits: Bryce Durbin

Trends of the Week

These next few weeks are guaranteed to be dominated by U.S. election news, so enjoy the diversity of news happenings out there while it lasts…

Quibi is dead
Few companies that have raised so much money have appeared quite dead-on-arrival as Jeffrey Katzenberg’s mobile video startup Quibi. This week, the company made the decision to shut down operations and call it quits. More here.

Pakistan unbans TikTok
It appears that the cascading threat of country-by-country TikTok bans has stopped for now. This week, TikTok was unblocked in Pakistan with the government warning the company that it needed to actively monitor content or it would face a permanent ban. Read more here.

Facebook Dating arrives in Europe
Facebook Dating hasn’t done much to unseat Tinder stateside, but the service didn’t even get the chance to test its luck in Europe due to some regulatory issues relating to its privacy practices. Now, it seems Facebook has landed in the tentative good graces of regulatory bodies and has gotten the go ahead to launch the service in a number of European countries. Read more here.

Until next week,

Lucas M.

Read More

Posted on

Calling Brussels VCs: Be featured in The Great TechCrunch Survey of European VC

TechCrunch is embarking on a major new project to survey the venture capital investors of Europe, and their cities.

Our survey of VCs in Brussels will capture how the city is faring, and what changes are being wrought amongst investors by the coronavirus pandemic. (Please note, if you have filled out the survey already, there is no need to do it again).

We’d like to know how Brussels’ startup scene is evolving, how the tech sector is being impacted by COVID-19 and, generally, how your thinking will evolve from here.

Our survey will only be about investors, and only the contributions of VC investors will be included. More than one partner is welcome to fill out the survey.

The shortlist of questions will require only brief responses, but the more you can add, the better.

You can fill out the survey here.

Obviously, investors who contribute will be featured in the final surveys, with links to their companies and profiles.

What kinds of things do we want to know? Questions include: Which trends are you most excited by? What startup do you wish someone would create? Where are the overlooked opportunities? What are you looking for in your next investment, in general? How is your local ecosystem going? And how has COVID-19 impacted your investment strategy?

This survey is part of a broader series of surveys we’re doing to help founders find the right investors.

For example, here is the recent survey of London.

You are not in Brussels, but would like to take part? Or you are in another part of the country? That’s fine! Any European VC investor can STILL fill out the survey, as we probably will be putting out a call to your city next anyway! And we will use the data for future surveys on vertical topics.

The survey is covering almost every European country on the continent of Europe (not just EU members, btw), so just look for your country and city on the survey and please participate (if you’re a venture capital investor).

Thank you for participating. If you have questions you can email mike@techcrunch.com

Read More

Posted on

10 Zurich-area investors on Switzerland’s 2020 startup outlook

European entrepreneurs who want to launch startups could do worse than Switzerland.

In a report analyzing Europe’s general economic health, cost of doing business, business environment and labor force quality, analysts looked for highly educated populations, strong economies, healthy business environments and relatively low costs for conducting business. Switzerland ended up ranking third out of 31 European nations, according to Nimblefins. (Germany and the UK came out first and second, respectively).

According to official estimates, the number of new Swiss startups has skyrocketed by 700% since 1996. Zurich tends to take the lion’s share, as the city’s embrace of startups has jump-started development, although Geneva and Lausanne are also hotspots.

As well as traditional software engineering startups, Switzerland’s largest city boasts a startup culture that emphasizes life sciences, mechanical engineering and robotics. Compared to other European countries, Switzerland has a low regulatory burden and a well-educated, highly qualified workforce. Google’s largest R&D center outside of the United States is in Zurich.

But it’s also one of the more expensive places to start a business, due to its high cost of living, salary expectations and relatively small labor market. Native startups will need 25,000 Swiss Francs to open an LLC and 50,000 more to incorporate. While they can withdraw those funds from the business the next day, local founders must still secure decent backing to even begin the work.

This means Switzerland has gained a reputation as a place to startup — and a place to relocate, which is something quite different. It’s one reason why the region is home to many fintech businesses born elsewhere that need proximity to a large banking ecosystem, as well as the blockchain/crypto crowd, which have found a highly amenable regulatory environment in Zug, right next door to Zurich. Zurich/Zug’s “Crypto Valley” is a global blockchain hotspot and is home to, among others, the Ethereum Foundation.

Lawyers and accountants tend to err on the conservative side, leading to a low failure rate of businesses but less “moonshot innovation,” shall we say.

But in recent years, corporate docs are being drawn up in English to facilitate communication both inside Switzerland’s various language regions and foreign capital, and investment documentation is modeled after the U.S.

Ten years ago startups were unusual. Today, pitch competitions, incubators, accelerators, VCs and angel groups proliferate.

The country’s Federal Commission for Technology and Innovation (KTI) supports CTI-Startup and CTI-Invest, providing startups with investment and support. Venture Kick was launched in 2007 with the vision to double the number of spin-offs from Swiss universities and draws from a jury of more than 150 leading startup experts in Switzerland. It grants up to CHF 130,000 per company. Fundraising platforms such as Investiere have boosted the angel community support of early funding rounds.

Swiss companies, like almost all European companies, tend to raise lower early-stage rounds than U.S. ones. A CHF 1-2 million Series A or a CHF 5 million Series B investment is common. This has meant smaller exits, and thus less development for the ecosystem.

These are the investors we interviewed:

Jasmin Heimann, partner, Ringier Digital Ventures

What trends are you most excited about investing in, generally?
Consumer-facing startups with first revenues.

What’s your latest, most exciting investment?
AirConsole — a cloud-gaming platform where you don’t need a console and can play with all your friends and family.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
I really wish that the business case for social and ecological startups will finally be proven (kind of like Oatly showed with the Blackstone investment). I also think that femtech is a hyped category but funding as well as renown exits are still missing.

What are you looking for in your next investment, in general?
I am looking for easy, scalable solutions with a great team.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
I think the whole scooter/mobility space is super hyped but also super capital intensive so I think to compete in this market at this stage is hard. I also think that the whole edtech space is an important area of investment, but there are already quite a lot of players and it oftentimes requires cooperation with governments and schools, which makes it much more difficult to operate in. Lastly, I don’t get why people still start fitness startups as I feel like the market has reached its limits.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Switzerland makes — maximum — half of our investments. We are also interested in Germany and Austria as well as the Nordics.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Zurich and Lausanne are for sure the most exciting cities, just because they host great engineering universities. Berne is still lagging behind but I am hoping to see some more startups emerging from there, especially in the medtech industry.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Overall, Switzerland is a great market for a startup to be in — although small, buying power is huge! So investors should always keep this in mind when thinking about coming to Switzerland. The startup scene is pretty small and well connected, so it helps to get access through somebody already familiar with the space. Unfortunately for us, typical B2C cases are rather scarce.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
I think it is hard to make any kind of predictions. But on the one hand, I could see this happening. On the other hand, I also think that the magic of cities is that there are serendipity moments where you can find your co-founder at a random networking dinner or come across an idea for a new venture while talking to a stranger. These moments will most likely be much harder to encounter now and in the next couple of months.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
I think travel is a big question mark still. The same goes for luxury goods, as people are more worried about the economic situation they are in. On the other hand, remote work has seen a surge in investments. Also sustainability will hopefully be put back on the agenda.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Not much. I think we allocated a bit more for the existing portfolio but otherwise we continue to look at and discuss the best cases. The biggest worries are the uncertainties about [what] the future might look like and the related planning. We tell them to first and foremost secure cash flow.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Totally! Some portfolio companies have really profited from the crisis, especially our subscription-based models that offer a variety of different options to spend time at home. The challenge now is to keep up the momentum after the lockdown.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
What gives me hope is to see that people find ways to still work together — the amount of online events, office hours, etc. is incredible. I see the pandemic also as a big opportunity to make changes in the way we worked and the way things were without ever questioning them.

Katrin Siebenbuerger Hacki, founder, Medows

Read More

Posted on

French TV networks team up to launch streaming service Salto

There’s a new streaming service in France called Salto. The companies behind the new service have been around for a while though. Salto is a joint initiative between TF1, France Télévisions and M6 — three major TV networks.

Those companies already had their own apps with live TV and ad-supported catch-up content. And of course, you can access content from these networks from your set-top box. But they’re trying something new with Salto.

For now, Salto is mostly an ad-free combination of all the individual apps from TF1, France Télévisions and M6. You can watch live TV from 19 different channels. You can play catch-up content from all three networks without any video ad.

It costs €6.99 per month. For €9.99, you can watch on two screens simultaneously. For €12.99 per month, you get four screens. Salto has released apps for Android, Android TV, iOS and tvOS. It also works in a web browser.

Such an offering probably won’t be enough to attract subscribers. That’s why Salto is slowly adding exclusive content to its platform as well. Salto is also going to be a good way to access content for kids in a dedicated section.

You can see some TV shows before they air on TV, such as an adaption from Agatha Christies’ ‘And Then There Were None’, the new season of Fargo. There are also some classic shows, such as Parks & Recreation and Seinfeld.

Who will be subscribing to Salto then? If you mostly watch live TV and you already know how to access catch-up content, Salto isn’t for you. If you already have access to premium content through a Canal+ subscription for instance, Salto isn’t for you.

But if you’re addicted to reality TV and daily soap operas, Salto could be a nice service to consume your favorite show. If you don’t pay for any streaming service, it could be a cheap service to get started and access some basic shows and movies.

Image Credits: Salto

Read More

Posted on

EU’s Google-Fitbit antitrust decision deadline pushed into 2021

The deadline for Europe to make a call on the Google -Fitbit merger has been pushed out again — with EU regulators now having until January 8, 2021, to take a decision.

The latest change to the provisional deadline, spotted earlier by Reuters, could be the result of one of the parties asking for more time.

Last month the deadline for a decision was extended until December 23 — potentially pushing the decision out beyond a year after Google announced its intention to buy Fitbit, back in November 2019. So if the tech giant was hoping for a simple and swift regulatory rubberstamping its hopes have been diminishing since August when the Commission announced it was going to dig into the detail. Once bitten and all that.

The proposed Fitbit acquisition also comes as Alphabet, Google’s parent, is under intense antitrust scrutiny on multiple fronts on home turf.

Google featured prominently in a report by the House Judiciary Committee on big tech antitrust concerns earlier this month, with US lawmakers recommending a range of remedies — including breaking up platform giants.

European lawmakers are also in the process of drawing up new rules to regulate so-called ‘gatekeeper’ platforms — which would almost certainly apply to Google. A legislative proposal on that is expected before the end of this year, which means it may appear before EU regulators have taken a decision on the Google-Fitbit deal. (And one imagines Google isn’t exactly stoked about that possibility.)

Both competition and privacy concerns have been raised against allowing Google get its hands on Fitbit users’ data.

The tech giant has responded by offering a number of pledges to try to convince regulators — saying it would not use Fitbit health and wellness data for ads and offering to have data separation requirements monitored. It has also said it would commit to maintain third parties’/rivals’ access to its Android ecosystem and Fitbit’s APIs.

However rival wearable makers have continued to criticize the proposed merger. And, earlier this week, consumer protection and human rights groups issued a joint letter — urging regulators to only approve the takeover if “merger remedies can effectively prevent [competition and privacy] harms in the short and long term”.

One thing is clear: With antitrust concerns now writ large against ‘big tech’ the era of ‘friction-free’ acquisitions looks to be behind Google et al.

Read More

Posted on

Google will let everyone migrate from Hangouts to Chat for free in 2021

Google’s strategy around its messaging apps is nothing if not messy right now (hello Hangouts, Meet, Chat, Duo and Co.), but it looks like things will get a bit easier come next year. We already knew that Hangouts’ time was coming to an end and as Google announced today, the company will allow all current Hangouts users to migrate to Chat — which was originally meant to only be its Slack-like messaging service for business users — in the first half of 2021.

One interesting wrinkle here: Chat will now also become free to use for consumers. Currently, you have to be a paying G Suite/Workspace user to access the service (though somehow it’s enabled on my free personal account).

While Chat isn’t an exact 1-to-1 replacement of Hangouts, it actually offers a bunch of additional features for group chats and collaboration around files and tasks, as well as new security tools. Chat, together with Rooms and Meet, will also be integrated deeply into the Gmail app as part of Google’s Workspace migration.

Image Credits: Google

Google says it will automatically migrate all Hangouts conversations, contacts and history to Chat, but it’s not providing details about this yet. Final timing, Google says, may still shift. It’s not clear, though, when Google will force everyone to migrate and shut down the Hangouts servers for good.

There are a few more details here: if you use Hangouts with Google Fi, Hangouts support will go away ‘early next year.’ Traditionally, Fi users were able to make calls and manage their text messages from Hangouts. That experience will migrate to Google’s Messages app.

If you’re a Google Voice user, there’s a similar transition happening. For voice calls and text messages, Hangouts users will now be directed to the Voice app and early next year, your Voice support will be removed from Hangouts.

And for all users in the U.S. and Europe, the ability to call phones from Hangouts will disappear at the beginning of next year — and group video calls in Hangouts will transition to Meet in November.

Yeah — that all sounds complicated, but it’s a problem of Google’s own making. A few years ago, the idea was to move Hangouts users to its Allo and Duo apps and business users to Chat and Meet (or whatever they were called back then). Allo flopped (and few people use Duo), leaving Google with the unenviable task of keeping the aging Hangouts platform around for the foreseeable future and making the overall transition harder and more complicated, to the point where I’m not sure that consumers really understand what’s happening.

Read More

Posted on

As investors and founders mature, Vienna emerges as a European startup hub

According to Austrian Startup Monitor, entrepreneurs have founded more than 2,200 startups in Austria since 2008, with the number of tech companies growing 12% per year since then, significantly faster than the 3% growth rate for traditional companies.

Home to roughly 50% of Austria’s startups, Vienna has a plethora of VC, corporate and university investors. Top VCs include 3TS Capital Partners, AC & Friends, Cudos Capital, FSP Ventures, Hansmen Group, i4g Investment, i5invest, LilO Ventures, next.march, primeCROWD, Speedinvest and Venionaire Capital, among others.

The local ecosystem benefits from several initiatives, including the Social Impact Awards, Vienna Startup Awards, Design Week, Climate KIC Stage, Innovation Incubation Center and INiTS Accelerator. The well-run Pioneers Festival contributed massively to the ecosystem for several years after a certain TechCrunch editor-at-large gave the organizers an excuse to expand on a simple TechCrunch meetup. But the festival was shuttered last year after its sale to a local accelerator meant that the event itself ran out of steam. Perhaps it was just as well, given this year’s pandemic.

State support for startups is also there. The Austrian government created a comprehensive startup program in 2016 to make the country more attractive to startups setting up there.

Standout exits include fitness app maker Runtastic, acquired by Adidas for $240 million in 2015, as well as listings marketplace Shpock, which was acquired by Norwegian publishing conglomerate Schibsted in 2015. Other notable startups originally from Vienna include mySugr, wikifolio, kompany and Codeship.

There have been jitters on the way, however. The Austrian Private Equity and Venture Capital Organization’s 2019 report found that Austria’s startups saw €237.6 million invested in 2018, but, this number fell 8.2% to €218 million in 2019; the number of deals exceeding €500,000 also dipped by 8.7%. Foreign funding also slowed in 2019 after a few years of a bull run — between 40% and 63% of deals sized €0.25-€1.99 million were significantly funded by foreign investors in 2018.

Despite the decline, local investors have started to pick up the slack, boosting the number of funding rounds over €5 million to 12 deals in 2019 from 11 in 2018. In both years, all but one of those deals drew a substantial part of the funding round from foreign investors.

We expect more to emerge from Vienna’s tech scene in the future. The Pioneers Festival (RIP) proved that Vienna is a fascinating bridge between Western European capital and entrepreneurial culture, and East European entrepreneurs and talent, which it will no doubt continue to benefit from in years to come. But — just as will happen with Lisbon this year and the loss of Web Summit — the loss of a major conference in Vienna to shine a light on the city and ecosystem, combined with the pandemic, may have cooling effects for the next couple of years.


Notable Vienna startups:

  • Newsadoo: Uses artificial intelligence to personalize news.
  • Cashpresso: Links customers, merchants and banks to offer consumer financing options.
  • Jobrocker: An online job search portal that connects applicants’ CVs with job openings.
  • Storyblok: A headless content management system.
  • Byrd: First-mile shipping service that allows customers to ship items hassle-free.
  • Music Traveler: A marketplace that centralizes spaces with musical instruments and equipment.
  • PAYUCA: Provides flexible access to parking spaces in private office and residential buildings.
  • Refurbed: Fast-growing marketplace for refurbished electronics, across the German-speaking world.
  • Presono: A web platform for creating, managing and showing presentations in companies.
  • Blockpit: Develops software for portfolio tracking, tax calculation and compliance reporting of transactions for cryptocurrencies and crypto assets.
  • Robo Wunderkind: A robot for kids to build and program.
  • Medicus: Converts health data with their cryptic numbers and medical language into an easy-to-understand visual experience.
  • Cybershoes: VR accessory that allows you to walk through your favorite VR games.

Here’s who we interviewed:

Eva Arh, principal, Capital 300

What trends are you most excited about investing in, generally?
B2B software, robotics, no/low-code automation, AI-enabled vertical solutions, e-health, companies enabling others to hire and engage talent remotely.

What’s your latest, most exciting investment?
Lokalise.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Companies that enable others to manage and automate billing even further (e.g., per API call), next-gen video conferencing, solutions guiding women through menopause, providing solutions that help companies to offer mental health services to distributed teams, bringing cloud kitchens to the next level (not running central kitchens).

What are you looking for in your next investment, in general?
As always, ambitious, smart, hard-working teams eager to build a category leader in a huge market.

What other types of products/services are you wary or concerned about?
Concerned about solutions that leverage behavioral data to influence people for the sake of optimizing profit, overload of sales and marketing tech, overload of chatbot providers. [It is] hard to compete with players that have benefited from huge network effects such as food delivery.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
We focus on German-speaking areas and Central Eastern Europe. Opportunistically we would also invest outside of the region, still in Europe.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Austria — no specific industry focus within software. However, well-positioned in the biotech space, CEE — given the strong presence of IT outsourcing companies, the region is well-positioned to build solutions in the business-process automation, dev tool space. Storyblok (our portfolio). Others to watch: Anyline, Adverity, Bitpanda, PlanRadar, Refurbed.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Regarding Vienna — we are seeing the first generation of entrepreneurs building global companies. Their and their team experience will be at utmost value creating a new wave of tech companies that compete on a global level.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Yes, we already see this — exciting companies coming out of small cities in Poland, Germany, etc. and companies going remote.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Telemedicine, online education has been accelerated. We see a shift that otherwise would have taken years, especially in the relatively conservative German-speaking area. As mentioned previously, mental health solutions, hiring and employing remotely are some of the opportunities highlighted by COVID-19. Companies that are heavily exposed are those that have been serving the long tail of companies, small merchants, and local businesses that were closed down or experienced much less traffic in past months and hence are extremely sensitive around their cost base, discontinuing services that are not 110% essential.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
We have always been very selective and focused, partnering up three to four times a year. We continue at the same pace. The companies that perform well despite COVID-19 are still in a strong position for attracting external capital. Of course, we help our portfolio to secure a runway and have a discussion how/whether the situation has impacted their offering/GTM. Some companies have to rethink their value proposition, some rethink their target groups either to make up for slower sales cycles or on the other hand to leverage and benefit from the current situation.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Yes, we see that Lokalise is growing heavily with the current customer base as their customers expand to new markets, likely to make up for slower revenue growth in their existing markets. We see that Nethone (fraud prevention) is able to double down on e-commerce. Online fraud and online transactions are skyrocketing as people spend much more time online. (On the other hand, their airline customers of course show a different trajectory.)

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
It is inspiring to see how founders go through the current situation, act instead of reacting, especially in those countries where there is less government support incentives in place. Personally, I am also happy to see that people use the work from home time to rethink and introduce healthier habits.

Any other thoughts you want to share with TechCrunch readers?
As the world has gone online and the location matters much less, there is an opportunity to distribute the created value and wealth more evenly — be it a company founded in a “non-tech-hub” location or be it talent hired remotely.

Read More

Posted on

France’s Health Data Hub to move to European cloud infrastructure to avoid EU-US data transfers

France’s data regulator CNIL has issued some recommendations for French services that handle health data, as Mediapart first reported. Those services should avoid using American cloud hosting companies altogether, such as Microsoft Azure, Amazon Web Services and Google Cloud.

Those recommandations follow a landmark ruling by Europe’s top court in July. The ruling, dubbed Schrems II, struck down the EU-US Data Privacy Shield. Under the Privacy Shield, companies could outsource data processing from the EU to the US in bulk. Due to concerns over US surveillance laws, that mechanism is no longer allowed.

The CNIL is going one step further by saying that services and companies that handle health data should also avoid doing business with American companies — it’s not just about processing European data in Europe. Once again, this is all about avoiding falling under U.S. regulation and rulings.

The regulator sent those recommendations to one of France’s top courts (Conseil d’État). SantéNathon, a group of organizations and unions, originally notified the CNIL over concerns about France’s Health Data Hub.

France is currently building a platform to store health data at the national level. The idea is to build a hub that makes it easier to study rare diseases and use artificial intelligence to improve diagnoses. It is supposed to aggregate data from different sources and make it possible to share some data with public and private institutions for those specific cases.

The technical choices have been controversial as the French government originally chose to partner with Microsoft and its cloud platform Microsoft Azure.

Microsoft, like many other companies, relies on Standard Contractual Clauses for EU-US data transfers. But the Court of Justice of the EU has made it clear that EU regulators have to intervene if data is being transferred to an unsafe country when it comes to privacy and surveillance.

The CNIL believes that an American company could process data in Europe but it would still fall under FISA702 and other surveillance laws. Data would still end up in the hands of American authorities. In other words, it is being extra careful with health data for now, while Schrems II is still unfolding.

“We’re working with health minister Olivier Véran on transferring the Health Data Hub to French or European platforms following the Privacy Shield bombshell,” France’s digital minister Cédric O told Public Sénat.

The French government is now looking at other solutions for the Health Data Hub. In the near future, if France’s top court confirms the CNIL’s recommendations, it could also have some effects for French companies that handle health data, such as Doctolib and Alan.

Read More