Bird has shut down scooter sharing in several cities in the Middle East, an operation that was managed by Circ, the micromobility startup it acquired in January. About 100 Circ employees have been laid off and as many as 10,000 Circ scooters have been sent to a third-party UAE-based company for recycling, according to multiple industry and company sources who asked not to be named because they weren’t authorized to speak with the media.
The shutdown — which Bird has couched as “pausing of operations” — comes less than six months after LA-based Bird announced it had acquired its European counterpart and touted plans to expand. Bird’s decision to shut down Circ’s entire Middle East business affects operations in Bahrain, UAE and Qatar.
Between 8,000 and 10,000 Circ scooters have been sent to EnviroServe, a UAE-based company that recycles electronics and other products, multiple sources who asked not to be named told TechCrunch. Almost 1,000 of the Circ scooters were new, according to one source.
Bird said in a statement that it is not leaving the Middle East. Instead, the company said it is “pausing operations” and plans to return to the region in the fall. Bird is still operating its own service in Tel Aviv.
“Bird is currently operating in Tel Aviv and we have temporarily paused operations in other parts of the Middle East as they become increasingly hotter at this time of the year,” the company said in an emailed statement. “During this pause, we are taking the opportunity to responsibly recycle parts of the old Circ fleet that were previously used in the region. Following extreme wear and tear, the Circ vehicles no longer met our rigorous quality standards. Selling or re-use of these vehicles would potentially result in safety and reliability issues, which would not have been fair or ethical to the purchasers or potential riders. We look forward to resuming our service throughout more parts of the region later this year.”
TechCrunch learned that several companies, including Berlin-based Tier Mobility, offered to buy the Circ-branded scooters that have been taken off the streets in Dubai and other Middle East cities. Bird declined these offers, according to two sources.
In the past two months, tens of thousands of electric scooters and bikes have been scrapped in the U.S., Canada, Europe and now the Middle East as micromobility companies pull back from markets in an effort to cut costs amid the COVID-19 pandemic.
Photos and videos showing piles of scrapped bright red JUMP bikes spread across Twitter last month and sparked widespread criticism and anger among bike advocates, urban planners and industry watchers. The bikes were part of the collateral damage that stemmed from a complex deal between Lime and Uber. Last month, Lime raised $170 million in a funding round led by Uber. As part of the deal, Uber offloaded JUMP, which it had acquired in 2018 for $200 million, to Lime. All 400 JUMP employees were laid off and at least 20,000 bikes and scooters were scrapped in the U.S. alone. Reports of JUMP bikes being pulled off streets and sent for recycling have popped up in Canada as well.
Tier Mobility CEO and co-founder Lawrence Leuschner had offered to buy the JUMP bikes. Tier Mobility also reached out to Bird.
“That has nothing to do with sustainable mobility and it needs to have consequences,” Leuschner said in a recent interview discussing the decision by companies to scrap scooters and bikes. “This is not what the industry should stand for and that’s why I have to speak up.”
Leuschner, who previously founded reBuy, a European market leader in used electronics, has said it is possible to properly and safely refurbish scooters and sell them to consumers. Tier Mobility refurbished and sold its old e-scooters to consumers after it replaced most of its fleet with newer hardware.
Circ burst on the scene in January 2019 with €55 million in Series A funding. The Berlin-based e-scooter startup, which was initially called Flash before it was rebranded, was founded by Delivery Hero and Team Europe founder Lukasz Gadowski.
The company expanded quickly across Europe and eventually into the Middle East. Just six months after it came out of stealth, Circ was in 21 cities across 7 countries — and it expanded even further throughout the rest of the year. But it encountered some of the same setbacks that other scooter-sharing companies faced in 2019. The company laid off staff in November at its regional operations and Berlin headquarters. The reduced headcount was driven by the fluctuation in users across seasons, “operational learnings” and a move to e-scooters with swappable batteries, Gadowski told TechCrunch at the time.
Daily Crunch: Apple Arcade expands with classic games
Apple adds classic titles to Apple Arcade, Microsoft experiences an outage and Coinbase is going public. This is your Daily Crunch for April 2, 2021.
The big story: Apple Arcade expands with classic games
Until now, Apple’s game subscription service was limited to exclusive new titles, but today it’s introducing two new categories: App Store Greats (popular iPhone games like Monument Valley+, Fruit Ninja Classic+, Cut the Rope Remastered and Badland+) and Timeless Classics (board games and puzzle games, such as Backgammon+ and Chess Play and Learn+).
This is a major expansion to the Apple Arcade back catalog, but it’s not simply a matter of putting previously free games behind a paywall. The Arcade versions of these titles will be ad-free and without in-app purchases — you’re never paying anything beyond the $4.99 monthly subscription fee. Also, some of these games had become unavailable in their original forms due to iOS and hardware updates.
The tech giants
Microsoft outage knocks sites and services offline — Microsoft stumbled back online Thursday after an hours-long outage in the middle of the U.S. west coast working afternoon.
Startups, funding and venture capital
Coinbase to direct list on April 14th, provide financial update on April 6th — The company will trade under the ticker symbol “COIN.”
Uruguayan payments startup dLocal quadruples valuation to $5B with $150M raise — This means that the five-year-old Uruguayan company has effectively quadrupled its valuation in a matter of months.
Backflip offers an easier way to turn used electronics into cold, hard cash — The company offers customers cash on delivery for their used electronics, which could be anything from iPhones to Game Boys.
Advice and analysis from Extra Crunch
How is edtech spending its extra capital? — Edtech M&A activity has continued to swell.
Tech in Mexico: A confluence of Latin America, the US and Asia — LatAm entrepreneurs seem to be looking to Asian tech giants for product inspiration and growth strategies.
RPA market surges as investors, vendors capitalize on pandemic-driven tech shift — Robotic process automation came to the fore during the pandemic as companies took steps to digitally transform.
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Three ways VC firms can construct sustainably diverse portfolios
Venture capital has a diversity problem: Data show that Black and Latinx founders received just 2.6% of overall funding in 2020. Women-founded teams received nearly 30% less funding in 2020 than they did in 2019.
For decades, a close-knit community of brilliant but like-minded individuals built a system of pattern recognition. It produced high-growth companies with homogenous leadership teams. They called it meritocracy. Those of us who didn’t fit the profile were told, or were left to assume, that we didn’t have what it takes.
When a founder needs funding but investors don’t think they “have what it takes,” it can quickly become a self-fulfilling prophecy. No matter how good you are and how much product-market fit you achieve, at some point “what it takes” to scale a company is money.
Until recently, the lack of diversity in the ecosystem was largely an issue to those of us directly affected by it. It wasn’t until the groundbreaking #metoo and #BlackLivesMatter movements that the lack of funding for women and minorities became both evident — and evidently problematic — to the rest of the world.
I believe that underrepresented founders are the most undervalued asset class in the U.S. today, and investors are starting to realize that diversity is not charity — it’s economic opportunity.
Just look at the data on women-founded startups, which deliver 63% higher ROI (according to First Round Capital), generate twice as much revenue for every dollar invested (according to BCG), and take one full year less time to exit (according to PitchBook & AllRaise). Founders that have it harder, but persevere, lead to stronger companies with outsized results for their investors.
The good news is that recent events jolted many into action. A flurry of pledges, micro-funds and quick investments in support of Black founders arrived in the wake of George Floyd’s murder last summer. Overnight, these founders were heavily courted for meetings and speaking opportunities from people and firms they didn’t have access to in the past. Some secured investments and built new relationships that will help down the line. For many, the timing was off, and they didn’t benefit materially. In the end, the frenzy quieted down, and only 3% of 2020 VC deal volume went to Black-founded companies.
Ashlee Wisdom, the co-founder and CEO of digital health platform Health in Her HUE, experienced this firsthand.
“Last summer I was overwhelmed with inbounds from investors, which felt great at first,” she said. “But I was new to venture; I didn’t know how to build a strategy around fundraising, and most of those investors were looking for companies at a later stage than mine. No one I spoke to during that time seemed to be willing to invest in my pre-seed round despite our demonstrated traction. On the positive side, I met a lot of great investors who made meaningful introductions to pre-seed and early-stage funds. And some of those later-stage investors are now watching Health In Her HUE’s progress.”
It’s too soon to tell how sustainable the progress made last year will be. But we do have evidence from prior times that small, cosmetic efforts at diversity do not result in lasting change. Just take a look at what’s happened to VC funding for women recently.
In the aftermath of #metoo, investors and corporations were also spurred to act, with some success. For a while, VC investments in women-founded companies increased slowly but steadily. But once COVID hit, and investors retreated to their closest and most trusted referral networks, VC funding for women took a huge step backward. Crunchbase data show more than 800 female-founded startups globally received a total of $4.9 billion in venture funding in 2020, through mid-December, representing a 27% decrease over the same period the prior year.
The lesson is this: Efforts at the periphery of venture capital do not make a difference in the long run. The good news is many have started taking action. To achieve systemic, long-term improvements, VC firms will need to make changes to their core system, building diversity into the primary investing process itself. Results will not be visible immediately, but they will be far more sustainable and, as the data suggest, more profitable over the lifetime of these funds. Here are three specific actions VC firms can take to achieve this:
1. Hire BIPOC and women investors
A recent PitchBook report notes that female investors are twice as likely to invest in companies with female founders and three times as likely in companies with female CEOs. And yet fewer than 10% of all VC partners are women. According to BLCK VC, more than 80% of venture firms don’t have a single Black investor on their team. That makes it less surprising that only 1 percent of venture-funded startup founders are Black.
When you hire from the same communities you want to invest in, and ensure your new hires are set up for success, you unlock dealflow, relationships, and insights into new markets and customer sets. This results in a more diverse portfolio and a stronger investment team, one that serves its entire portfolio of companies better.
2. Measure the top of your funnel
Inputs lead to outputs. VC firms should do everything they can to foster stronger relationships with underrepresented founder communities to enable more diversity at the top of the deal flow funnel.
Partner, sponsor and invest in organizations like Female Founders Alliance, SoGal Foundation, Black Women Talk Tech and more. Go out of your way to attend events, ask for introductions, schedule casual coffee meetings and meet as many founders in those networks as you can — and foster those relationships meaningfully over time. This is how you seed decades of great dealflow.
3. Invest directly in emerging fund managers
There are hundreds of new funds, many of them with less than $50 million in assets under management, with direct access to pockets of talent that you are not currently seeing. These general partners have trusting, authentic relationships with founders who might be wary of mainstream VC. If you are a larger VC fund, you should be actively investing in them. Emerging managers can act as your scouts, and, in return, you will help build the ecosystem itself.
I believe that the lack of diversity in venture capital is a once-in-a-generation opportunity for those willing to make the earliest bets. If we invest in women at the same rate that we invest in men, this could boost the global economy by up to $5 trillion. That is a huge amount of return up for grabs. A homogenous portfolio misses that opportunity.
Most investors I know are aware of the opportunity and genuinely want to do better. The more urgency they feel, the more likely they are to spin up independent initiatives to address inequities directly. While these can be helpful, they’re also not sustainable. The best way to build a sustainably diverse portfolio is to do the slow, hard work of change from the inside out.
Hack takes: A CISO and a hacker detail how they’d respond to the Exchange breach
The cyber world has entered a new era in which attacks are becoming more frequent and happening on a larger scale than ever before. Massive hacks affecting thousands of high-level American companies and agencies have dominated the news recently. Chief among these are the December SolarWinds/FireEye breach and the more recent Microsoft Exchange server breach. Everyone wants to know: If you’ve been hit with the Exchange breach, what should you do?
To answer this question, and compare security philosophies, we outlined what we’d do — side by side. One of us is a career attacker (David Wolpoff), and the other a CISO with experience securing companies in the healthcare and security spaces (Aaron Fosdick).
Don’t wait for your incident response team to take the brunt of a cyberattack on your organization.
CISO Aaron Fosdick
1. Back up your system.
A hacker’s likely going to throw some ransomware attacks at you after breaking into your mail server. So rely on your backups, configurations, etc. Back up everything you can. But back up to an instance before the breach. Design your backups with the assumption that an attacker will try to delete them. Don’t use your normal admin credentials to encrypt your backups, and make sure your admin accounts can’t delete or modify backups once they’ve been created. Your backup target should not be part of your domain.
2. Assume compromise and stop connectivity if necessary.
Identify if and where you have been compromised. Inspect your systems forensically to see if any systems are using your surface as a launch point and attempting to move laterally from there. If your Exchange server is indeed compromised, you want it off your network as soon as possible. Disable external connectivity to the internet to ensure they cannot exfiltrate any data or communicate with other systems in the network, which is how attackers move laterally.
3. Consider deploying default/deny.
RPA market surges as investors, vendors capitalize on pandemic-driven tech shift
When UIPath filed its S-1 last week, it was a watershed moment for the robotic process automation (RPA) market. The company, which first appeared on our radar for a $30 million Series A in 2017, has so far raised an astonishing $2 billion while still private. In February, it was valued at $35 billion when it raised $750 million in its latest round.
RPA and process automation came to the fore during the pandemic as companies took steps to digitally transform. When employees couldn’t be in the same office together, it became crucial to cobble together more automated workflows that required fewer people in the loop.
RPA has enabled executives to provide a level of workflow automation that essentially buys them time to update systems to more modern approaches while reducing the large number of mundane manual tasks that are part of every industry’s workflow.
When UIPath raised money in 2017, RPA was not well known in enterprise software circles even though it had already been around for several years. The category was gaining in popularity by that point because it addressed automation in a legacy context. That meant companies with deep legacy technology — practically everyone not born in the cloud — could automate across older platforms without ripping and replacing, an expensive and risky undertaking that most CEOs would rather not take.
RPA has enabled executives to provide a level of workflow automation, a taste of the modern. It essentially buys them time to update systems to more modern approaches while reducing the large number of mundane manual tasks that are part of just about every industry’s workflow.
While some people point to RPA as job-elimination software, it also provides a way to liberate people from some of the most mind-numbing and mundane chores in the organization. The argument goes that this frees up employees for higher level tasks.
As an example, RPA could take advantage of older workflow technologies like OCR (optical character recognition) to read a number from a form, enter the data in a spreadsheet, generate an invoice, send it for printing and mailing, and generate a Slack message to the accounting department that the task has been completed.
We’re going to take a deep dive into RPA and the larger process automation space — explore the market size and dynamics, look at the key players and the biggest investors, and finally, try to chart out where this market might go in the future.
Meet the vendors
UIPath is clearly an RPA star with a significant market share lead of 27.1%, according to IDC. Automation Anywhere is in second place with 19.4%, and Blue Prism is third with 10.3%, based on data from IDC’s July 2020 report, the last time the firm reported on the market.
Two other players with significant market share worth mentioning are WorkFusion with 6.8%, and NTT with 5%.
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