Back in April, Facebook announced it would be working with a group of academics to establish an independent research commission to look into issues of social and political significance using the company’s own extensive data collection. That commission just came out of stealth; it’s called Social Science One, and its first project will have researchers analyzing about a petabyte’s worth of sharing data.
The way the commission works is basically that a group of academics is created and given full access to the processes and data sets that Facebook could potentially provide. They identify and help design interesting sets based on their experience as researchers themselves, then document them publicly — for instance, a set (imaginary for now) may be described 10 million status updates taken during the week of the Brexit vote, with such and such metadata included.
This documentation describing the set doubles as a “request for proposals” from the research community. Other researchers interested in the data propose analyses or experiments, which are evaluated by commission. These proposals will be peer-reviewed with help from the Social Science Research Council. If a proposal has merit, it may be awarded funding, data, and other benefits; resulting papers can be published however the researchers wish, with no restrictions like pre-approval by Facebook or the commission.
“The data collected by private companies has vast potential to help social scientists understand and solve society’s greatest challenges. But until now that data has typically been unavailable for academic research,” said Social Science One co-founder, Harvard’s Gary King, in a blog post announcing the initiative. “Social Science One has established an ethical structure for marshaling privacy preserving industry data for the greater social good while ensuring full academic publishing freedom.”
If you’re curious about the specifics of the partnership, it’s actually been described in a paper of its own, available here.
The first data set is a juicy one: “almost all” public URLs shared and clicked by Facebook users globally, accompanied by a host of useful metadata.
It will contain “on the order of 2 million unique URLs shared in 300 million posts, per week,” reads a document describing the set. “We estimate that the data will contain on the order of 30 billion rows, translating to an effective raw size on the order of a petabyte.”
The metadata includes country, user age, device and so on, but also dozens of other items, such as “ideological affiliation bucket,” the proportion of friends versus non-friends who viewed a post, feed position, the number of total shares, clicks, likes, hearts, flags… there’s going to be quite a lot to sort through. Naturally all this is carefully pruned to protect user privacy — this is a proper research data set, not a Cambridge Analytica-style catch-all siphoned from the service.
In a call accompanying the announcement, King explained that the commission had much more data coming down the pipeline, with a focus on disinformation, polarization, election integrity, political advertising and civic engagement.
“It really does get at some of the fundamental questions of social media and democracy,” King said on the call.
The other sets are in various stages of completeness or permission: post-election survey participants in Mexico and elsewhere are being asked if their responses can be connected with their Facebook profiles; the political ad archive will be formally made available; they’re working on something with CrowdTangle; there are various partnerships with other researchers and institutions around the world.
A “continuous feed of all public posts on Facebook and Instagram” and “a large random sample of Facebook newsfeeds” are also under consideration, probably encountering serious scrutiny and caveats from the company.
Of course, quality research must be paid for, and it would be irresponsible not to note that Social Science One is funded not by Facebook but by a number of foundations: the Laura and John Arnold Foundation, The Democracy Fund, The William and Flora Hewlett Foundation, The John S. and James L. Knight Foundation, The Charles Koch Foundation, Omidyar Network’s Tech and Society Solutions Lab and The Alfred P. Sloan Foundation.
You can keep up with the organization’s work here; it really is a promising endeavor and will almost certainly produce some interesting science — though not for some time. We’ll keep an eye out for any research emerging from the partnership.
Apple has just poached one of Google’s top AI executives in a move likely to have far-reaching consequences.
Apple has hired John Giannandrea, previously Google’s head of AI and Search, The New York Times reports. Giannandrea will lead Apple’s “machine learning and A.I. strategy,” the Cupertino company said in a statement to the Times; he will be one of only 16 executives that report directly to CEO Tim Cook.
Just yesterday, The Information (paywalled) had reported that Giannandrea would be stepping down from his role at Google and would be replaced by 19-year Google veteran Jeff Dean. Giannandrea first joined Google in 2010 after it acquired MetaWeb, where he served as CTO. The startup sought to make search results more contextually aware through its hefty database of tagged data.
The hire is particularly important as Apple has seemed to fall far behind its rivals in the race to build smarter software powered by artificial intelligence. Siri, the digital assistant into which Apple has pumped much of its consumer-facing AI technologies, is far behind Amazon’s Alexa and Google’s Assistant in capabilities.
TechCrunch chatted with Giannandrea at our most recent Disrupt SF conference, where he spoke at length about how humans could help make computers smarter, but that we could also lend them our biases if we aren’t careful.
Google is announcing a fair number of updates to G Suite at its Next conference today, most of which focus on the user experience. In addition to those, though, the company also launched a new security investigation tool for admins that augments the existing tools for preventing and detecting potential security issues. The new tool builds on those and adds remediation features to the G Suite security center.
“The overall goal of the security center in G Suite is to provide administrators with the visibility and control they need to prevent, detect and remediate security issues,” said David Thacker, Google’s VP of product management for G Suite. “Earlier this year, we launched the first major components of this security center that help admins prevent and detect issues.”
Now with this third set of tools in line, G Suite admins can get a better understanding of the threats they are facing and how to remediate them. To do this, Thacker said, analysts and admins will be able to run really advanced queries over many different data sources to identify the users who have been impacted by a breach and then investigate what exactly happened. The tool also makes it easy for admins to remove access to certain files or to delete malicious emails “without having to worry about analyzing logs, which can be time-consuming or require complex scripting,” as Thacker noted.
This new security tool is now available as an Early Adopter Program for G Suite Enterprise customers.
Since its debut on the TechCrunch Disrupt stage in September 2016, demand for a service like productboard, which gives companies a holistic view of product development and encourages input from across an organization, has only gotten more acute, according to company chief executive Hubert Palan.
Now, with an $8 million commitment from Kleiner Perkins Caufield & Byers, with participation from Index Ventures, Credo Ventures, Reflex Capital and Rockaway Capital, alongside a host of angel investors, the company is looking to expand its sales and marketing and product development efforts to bring the benefits of its toolkit to more companies.
In the two years since TechCrunch last saw productboard, the company’s user base has grown significantly, from 100 customers in 2016 to more than 1,200 companies today, spanning a broad range of industries.
For Palan, the company’s growing user base (which now includes medical device companies, academic publishers and news organizations in addition to traditional digital product developers) is proof of a new demand in the market for more inputs around product design and development.
“Every company is now a digital company,” Palan said. “So every company needs to worry about digital product design.”
The company’s toolkit still includes features that allow it to hoover up information from customer support tickets, emails, input from sales teams and user research, to organize and prioritize features that need to be built.
But now, the company’s services allow anyone in an organization (with the proper access) to provide feedback and track the process of product development.
“Product Excellence is no longer optional,” said Palan in a statement. “These days competitors arise in a matter of months, not years. Customer loyalty is declining and users will happily switch to a competing solution that offers a better product experience. It’s more critical than ever to get the right products to market faster.”
As part of the financing, Kleiner Perkins’ new general partner, Ilya Fushman, will join the company’s board of directors. Fushman, who was integral in locking down productboard’s seed financing when he was at Index Ventures, has a long product history from his time at Dropbox, and is a welcome addition to the company’s board, Palan said.
While Fushman’s imprimatur is one sign of the company’s viability, the investment from strategic angel investors like Intercom co-founders Eoghan McCabe and Des Traynor; Clark Valberg, the co-founder of InVision; and Larry Gadea, the founder of Envoy, is still another.
“Product management is a core function in every technology organization, but few dedicated tools exist for it,” said Fushman, in a statement.
Tesla said Friday in a regulatory filing that the U.S. Securities and Exchange Commission and Department of Justice are investigating projections made last year about Model 3 production rates. The SEC has issued subpoenas for information related to Model 3 production estimates. The DOJ, which is running a separate investigation over Model 3 production targets, has stopped short of taking that action.
The information contained in Tesla’s 10Q filing backs up an October 26 article by The Wall Street Journal that reported the FBI was investigating whether the company misstated information about Model 3 production and misled investors. The FBI is the investigating arm of the DOJ.
Tesla issued a statement at the time of the article, acknowledging that it had received a voluntary request for documents from the Department of Justice about its public guidance for the Model 3 ramp. “We were cooperative in responding to it,” the statement issued last week said. “We have not received a subpoena, a request for testimony, or any other formal process, and there have been no additional document requests about this from the Department of Justice for months.”
This latest filing provides further confirmation and clarifies the extent of the investigations. It’s also the first time Tesla has said that the SEC has issued subpoenas to the company for information about the Model 3 production.
Here’s the whole nugget in the SEC filing:
We receive requests for information from regulators and governmental authorities, such as the National Highway Traffic Safety Administration, the National Transportation Safety Board, the SEC, the Department of Justice (“DOJ”) and various state agencies. We routinely cooperate with such regulatory and governmental requests.
In particular, the SEC has issued subpoenas to Tesla in connection with (a) Mr. Musk’s prior statement that he was considering taking Tesla private and (b) certain projections that we made for Model 3 production rates during 2017 and other public statements relating to Model 3 production. The DOJ has also asked us to voluntarily provide it with information about each of these matters and is investigating. Aside from the settlement with the SEC relating to Mr. Musk’s statement that he was considering taking Tesla private, there have not been any developments in these matters that we deem to be material, and to our knowledge no government agency in any ongoing investigation has concluded that any wrongdoing occurred. As is our normal practice, we have been cooperating and will continue to cooperate with government authorities. We cannot predict the outcome or impact of any ongoing matters. Should the government decide to pursue an enforcement action, there exists the possibility of a material adverse impact on our business, results of operation, prospects, cash flows, and financial position.
We are also subject to various other legal proceedings and claims that arise from the normal course of business activities. If an unfavorable ruling or development were to occur, there exists the possibility of a material adverse impact on our business, results of operations, prospects, cash flows, financial position and brand.
This didn’t stop CEO Elon Musk from blasting the WSJ for the report during a lengthy podcast interview released Friday with Recode’s Kara Swisher.
“The amount of untruthful stuff that is written is unbelievable. Take that Wall Street Journal front-page article about, like, ‘The FBI is closing in.’ That is utterly false. That’s absurd. To print such a falsehood on the front page of a major newspaper is outrageous. Like, why are they even journalists? They’re terrible. Terrible people.”
Tesla recently reached a settlement with the SEC, which began with a now infamous “funding secured” tweet by Musk about taking the electric automaker private. A federal judge approved October 16 Musk’s settlement with the SEC over securities fraud allegations. The SEC alleged in a complaint filed in September that Musk lied when he tweeted on August 7 that he had “funding secured” for a private takeover of the company at $420 per share.
Two popular car alarm systems have fixed security vulnerabilities that allowed researchers to remotely track, hijack and take control of vehicles with the alarms installed.
The systems, built by Russian alarm maker Pandora and California-based Viper (or Clifford in the U.K.), were vulnerable to an easily manipulated server-side API, according to researchers at Pen Test Partners, a U.K. cybersecurity company. In their findings, posted Friday, the API could be abused to take control of an alarm system’s user account — and their vehicle.
It’s because the vulnerable alarm systems could be tricked into resetting an account password because the API was failing to check if it was an authorized request, allowing the researchers to log in.
Although the researchers bought alarms to test, they said “anyone” could create a user account to access any genuine account or extract all the companies’ user data.
The researchers said some three million cars globally were vulnerable to the flaws (since fixed).
In one example demonstrating the hack, the researchers geolocated a target vehicle, tracked it in real time, followed it, remotely killed the engine and forced the car to stop, then unlocked the doors. The researchers said it was “trivially easy” to hijack a vulnerable vehicle. Worse, it was possible to identify some car models, making targeted hijacks or high-end vehicles even easier.
According to their findings, the researchers also found they could listen in on the in-car microphone, built-in as part of the Pandora alarm system for making calls to the emergency services or roadside assistance.
Ken Munro, founder of Pen Test Partners, told TechCrunch this was their “biggest” project.
The researchers contacted both Pandora and Viper with a seven-day disclosure period, given the severity of the vulnerabilities. Both companies responded quickly to fix the flaws.
When reached, Viper’s Chris Pearson confirmed the vulnerability has been fixed. “If used for malicious purposes, [the flaw] could allow customer’s accounts to be accessed without authorization.”
Viper blamed a recent system update by a service provider for the bug and said the issue was “quickly rectified.”
“Directed [which owns Viper] believes that no customer data was exposed and that no accounts were accessed without authorization during the short period this vulnerability existed,” said Pearson, but provided no evidence to how the company came to that conclusion.
In a lengthy email, Pandora’s Antony Noto challenged several of the researcher’s findings, summated: “The system’s encryption was not cracked, the remotes where not hacked, [and] the tags were not cloned,” he said. “A software glitch allowed temporary access to the device for a short period of time, which has now been addressed.”
The research follows work last year by Vangelis Stykas on the Calamp, a telematics provider that serves as the basis for Viper’s mobile app. Stykas, who later joined Pen Test Partners and also worked on the car alarm project, found the app was using credentials hardcoded in the app to log in to a central database, which gave anyone who logged in remote control of a connected vehicle.
Outdoor Tech’s Chips ski helmet speakers are a hot mess of security flaws
It’s not always easy to do the right thing or to make ethical decisions in a complex business environment. People get lost inside large organizations and group think can overwhelm even normally ethical individuals. Converscent has created a platform to help, and today it announced a new benchmarking dashboard to allow companies to measure just how well they are doing from an ethical perspective.
In recent times, we’ve witnessed the impact it has when companies don’t behave ethically. Converscent CEO Patrick Quinlan says that there is real cost for behaving badly both in terms of dollars and reputation. He believes that it’s in a company’s best interest to stay on top of undesirable behavior before it spirals out of control.
Quinlan pointed out whether it’s the diesel scandal at Volkswagen or the sexual harassment revealed by Susan Fowler at Uber, it has changed the conversation about ethics. He says it’s no longer just about bottom line financial results, how you behave as a company matters too in the court of public opinion and in financial markets.
He believes this can be measured and the Converscent Ethics Dashboard is designed to provide metrics about how well your company is complying with a set of internal guidelines. The Conversent platform includes components to enable employees to safely report bad practices going on in a company such as bribery, corruption, sexual harassment and more. A more automated API driven system pulls in data from a variety of internal systems and analyzes that for ethical gaps.
Much like companies audit their financial systems, you can start to audit how ethical the organizational structure is and how negative behavior is being handled. The company not only looks at internal data, it can help customers benchmark against others in their industries. Quinlan says that it’s possible to spot a trend even before someone reports it.
“Sometimes you have this interactive code of conduct, where there’s a new vice president in a region and suddenly page views on the sexual harassment section of the Code of Conduct have increased 200% in the 90 days after he started. That’s easy, right? There’s a reason that’s happening, and our system will actually tell you what’s happening,” Quinlan explained.
He says trend reporting like this can help a company spot a problem before it spirals out of their control. In other cases, it may be more subtle, but Converscent can pick up less obvious trends as well.
Conversent, which launched in 2013, has raised almost $72 million. They have 630 customers with 6.4 million employees accessing the Converscent platform. Customers include Kimberly Clark, Microsoft, Capgemini and Under Armour.
Target runs are about to get a lot easier. The retailer today is officially expanding its new curbside pickup service called Drive Up to the first locations outside of its home market of Minneapolis-St. Paul, where it had been in pilot testing. With Drive Up, customers can place orders using the Target app on their phone, then drive to their local store and have their purchases brought out directly to their vehicles, minutes after arrival.
Starting today, nearly 270 stores across Florida, Texas and the southeast will now offer Drive Up to their customers, which is still on track to reach 1,000 of Target’s 1,800 stores by year-end.
In addition to Florida and Texas, some stores in Alabama, Georgia, Mississippi, Oklahoma, Louisiana, and South Carolina also now have access to Drive Up. The locations will often overlap with where Target’s Shipt delivery service is available.
With Drive Up, Target aims to better compete with the likes of Walmart and Amazon.
Both today offer curbside pickup of groceries – the former via its online Walmart Grocery shopping service, and the latter through AmazonFresh and Whole Foods. Target, meanwhile, acquired grocery delivery service Shipt for over half a billion last year. The service has yet to roll out a grocery pickup option. (That’s something in discussion, but the near-term focus is on expanding Shipt to the majority of Target’s U.S. stores by the end of the year.)
In addition, both Amazon and Walmart offer in-store pickups and self-serve pickup experiences with Amazon Lockers and Walmart’s Pickup Towers, where available.
Target Drive Up doesn’t directly compete with either grocery pickup or self-serve. It isn’t for fresh and frozen items, but is for almost anything else – from everyday essentials to TVs to clothing to beauty to household goods and more. Consumer packaged goods can be ordered through Drive Up, too, like chips, crackers, cereal, cookies, canned goods, coffee, etc.
The assortment is similar to what’s available for delivery through Target’s next-day service, Target Restock, which equates to hundreds of thousands of SKUs. But it’s a smaller product selection compared with Target.com’s online inventory for home delivery or in-store pickup.
How Drive Up Works
Using Drive Up is pretty simple – something that reflects the fact that Target has its own in-house engineering teams developing its new e-commerce experiences. Drive Up was built by a team of eight, including four engineers, in a matter of months starting last April. By summer 2017, it was being tested internally. And by October, it had rolled out to consumers in Target’s home market.
To get started, you shop for items as usual in the Target app.
But there will now be a new option for “drive up” on the product detail screen. This screen also shows you if the item is in stock at your local store, if you can order it for in-store pickup, and how soon it could be delivered to your home.
To order it for “drive up” pickup, you just tap that option to add the item to your cart. You can also move items to “drive up” from the checkout screen, if you prefer. Cartwheel discounts won’t be available on Drive Up items – you have to go in store for that.
The app will also ask you for make of car (SUV, van, wagon, etc.) and color as part of the ordering experience.
After you complete the checkout, the app will inform you that your “drive up” order will be “ready within 2 hours.” But that’s just Target giving itself a buffer, it seems.
In early tests, Target was putting orders together as fast as 21 minutes, according to an analyst report from Gene Munster of Loup Ventures.
That speed comes from having trained, dedicated store staff who handle orders as soon as they come in. On their own handheld devices (Target calls the store staff’s Android-based mobile Zebra device a “MyDevice”), staff will see pending orders and customers’ ETA to the store.
The employee pulls items from store stock in the back room, as well as any other remaining items from the floor – scanning barcodes as inventory moves from stock to cart, then cart to bagged order.
Items are currently being bagged in special “Drive Up” plastic bags, which are slightly larger and sturdier than Target’s regular bags.
These are placed in cardboard bins at the customer service desk while larger items – like TVs – would sit on the floor behind the service desk.
The Target mobile app will alert the customer as soon as their order is filled and ready.
The customer then hits the “I’m on my way” button in their app, which notifies Drive Up staff via an alert – a car horn beeping twice – on their MyDevice. (The engineers added the car honk during pilot tests, because they found other types of alerts were getting missed. So if you hear a car horn inside a Target store one day, that’s probably why.)
Target’s app asks customers to share their location. This allows staff to get a head’s up on the customer’s arrival, but doesn’t continue to track location after orders are complete. (However, as a nice touch for the privacy-minded, customers who don’t feel comfortable sharing their location, can choose to share their status manually instead.)
At arrival, customers park in one of four designated spaces next to a “Drive Up”-branded pole that’s lit up at night thanks to the solar panel at its top. They don’t have to call a phone number – Target staff knows they’ve arrived. (Yep, the car horn notification again). An employee then brings the order to customer’s car.
The wait time, during Munster’s tests, averaged an impressive 1 minute, 18 seconds. (While I tested it as well, I can’t speak to wait time as it was pre-launch, and special considerations were taking place for demo purposes. But I did find the checkout flow in the app to be easy to follow.)
As opposed to asking for a driver’s license, the Target employee will scan a barcode in the customer’s app which confirms their identity. The customer finger signs on the employee’s device to pay and the transaction is completed with a “thank you” confirmation screen appearing in the customer’s Target app.
Drive Up’s impact on in-store sales?
While it makes sense to offer curbside pickup for competitive reasons, there is a question as to whether it will lead to a decrease in foot traffic in stores and the related impulse buys Target is famous for.
That’s not been the case so far, claims Dawn Block, Target’s SVP of Digital. While it’s too early to state this definitively, Target believes these orders will end up being additive to its bottom line.
“We find this is a slightly different trip type. It’s really more of a fill-in and a quick trip,” Block explains. “And when the guests have time and want to head into the store, we find that they’re doing that and they’ll continue to do that….We believe that it absolutely is [additive],” she says.
If that turns out to be true, Drive Up could require Target to adjust its staffing in some locations.
During pilot testing, some stores managed with their existing teams, while others required staff to work more hours or hired additional personnel. And now that customers are getting orders at their cars in under two minutes, Target’s given itself a tight baseline to maintain even as Drive Up scales.
“We will watch the staffing levels really closely and make sure that we’re continuing to deliver on the guest expectations,” Block says. “The guests love that speed and convenience. So we’re going to staff appropriately to keep that up,” she commits.
But in the broader market, Drive Up isn’t just competing against Target’s own in-store traffic – it’s competing with the idea that shoppers will still visit physical stores when they can instead push buttons on their phone and have items appear at their home only hours later.
Target says it will be getting the word out about Drive Up through things like in-store signature, belt wraps (see above), and its team members.
The Drive Up service will continue to roll out across the U.S. throughout the year.
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.
This week was something of a first for the crew, twice. First, we had two guests on the show, and, also, we only made it through two and a half topics. The former is good, the latter is, well, we’ll see.
So, this week Matthew Lynley and I were joined by David Chao, co-founder and general partner at DCM, and Steve Vassallo, a general partner at Foundation Capital. Points to both for being guinea pigs.
Heading into our first topic I’m sorry to inform you that, at least in terms of Equity, scooters are the new Uber. So, we wound up talking about both this week. We started with the fact that Bird is raising new capital at an even more staggering valuation than before ($2 billion!), and that Lime is working to raise a truckload of capital itself. (Reports vary, but it’s probably a $250 million equity round at around a $750 million valuation. There may also be some debt in the mix for Lime. More when we lock that down.)
And, as Chao’s firm is an investor in the space, we had even more to chew on.
Next up we dug into the massive new Opendoor round. The firm’s new $325 million puts it into a solid position to help people sell their houses. Which markets are the best fit was something for us to unspool, along with public market comps, such as they are. But most critical, at least in my view, was the idea of risk. On that point Vassallo made a reasonable argument regarding stress testing. We’ll see.
And finally, we touched on Meituan’s impending IPO, and how it came to be.
Thanks for sticking with Equity after all this time. We’ll be back next week with another round of chatter about the latest, greatest, and dumbest that tech has to offer.
Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple Podcasts, Overcast, Pocket Casts, Downcast and all the casts.
Few properties seem better suited to tap VR than Star Wars, if only because… you know, lightsabers.
And Lucasfilm knows it. They’ve just announced Star Wars: Vader Immortal — a three-part, at-home experience that’ll launch on Oculus’ just announced standalone Quest headset.
Alas, there’s not much to go on besides the name, a quick teaser trailer and that it’s launching sometime in 2019. Lucasfilm does note that it’ll be a “yet untold story” that’ll take place across three episodes, with the story writing led by Dark Knight writer David S. Goyer.
This isn’t the first time the Lucasfilm/ILM teams have dabbled with VR. They released a short one-off experience called Trials of Tatooine for the HTC Vive two years ago, and they worked with The Void to build the massive, full-building VR game called Secrets of the Empire that launched at Disneyland last year. But Trials was short and experimental, and Secrets requires you to be in a very specific place in the real world. This one sounds like it’ll be a bit more substantial, and intended for a wider audience.
(*Tangent: For what it’s worth, Secrets of the Empire is one of the more mind-blowing VR experiences I’ve ever had. I left feeling that it was a bit pricey for the amount of time it lasted, but nearly a year later I’m still thinking about how damned cool it was.)
More on this as we hear about it.
Update: While our headline initially called it a “game”, ILM/Oculus is careful to call it a “series”/”experience”, so we’ll stick with that, for accuracy.
If you’ve made any payments with a chip card, you’ve probably had awkward moments — those long seconds after you’ve inserted the card and everyone behind you is (literally or metaphorically) tapping their foot, waiting for the card to be processed.
Well, Square has been working on this problem for a while now. Last fall, for example, CEO Jack Dorsey said the company had gotten the processing time down to under three seconds.
Today, the company is announcing that it’s shaved even more time off, and that Square contactless and chip Readers and Registers can now process chip cards in two seconds. To achieve this, it says it’s worked closely with payment partners — and it’s also streamlined the process so that you can remove your card as soon as it’s read, without waiting for the response from the card issuer.
In contrast, when the Wall Street Journal timed chip cards in over 50 transactions a couple years ago, it found that the average processing time was 13 seconds. Those extra seconds might not sound like much in theory, but again, if you’re in a hurry or you’ve got a line of people behind you, the wait can be painful.
Plus, it sounds like this can make a real difference for businesses. In the announcement, Regan Long, co-founder and brewmaster at Local Brewing Co., said that with his brewery’s location near the Giants’ AT&T Park in San Francisco, there’s usually “a rush of customers all ready to close out their open beer tabs at the same time.”
“With Square’s chip card reader update, we’ve cut processing time in half — helping us keep customers happy and on their way to catch the first pitch,” he added.
In addition to faster chip card processing, Square is making another speed-related announcement: With the latest update, Square’s free point-of-sale app will allow sellers to skip collecting signatures if they choose.
When it comes to reaching would-be customers today, one of the biggest investments that brands and retailers will make is in advertising, to the tune of nearly $630 billion globally. Now, a startup called Dosh, which offers cash back on purchases, is announcing that it has raised $40 million to take on the advertising industry, with the pitch that its app provides a more targeted and guaranteed way of getting consumers to bite.
The funding — $20 million in equity and $20 million in venture debt — is led by Goodwater Capital and Western Technology Investment. Previous investor PayPal, along with new investors BAM Capital and Anthem Venture Partners, also participated. Sources close to the company confirm that the funding was done on approximately a $300 million valuation. It has raised $96 million in total, including both equity and debt.
“Instead of taking all in equity we decided to split because of the strength of the company at the moment,” said Ryan Wuerch, Dosh’s founder and CEO, in an interview, who said the funding would be used for hiring, business development and technology investment. “We want to be opportunistic.”
It was only nine months ago that Dosh last raised dosh; $44 million on a $241 million valuation. In the interim, the startup has been on a roll — at one point, in the holiday spending period, hitting No. 1 among U.S. shopping apps and clocking in some $50 million in cash back to its users, doubling those returns since last April. It now has 3 million card-linked subscribers and more than 150,000 retailers and brands signed up to its platform.
Up to now, Dosh’s business model has been to forge deals with retailers and brands — partners include Nike, Toms, Gap, Walgreens, Walmart, Jack in the Box and more — and payment card providers like Visa and Mastercard. When a user links up a card, and she or he buys something from the retailers and brands connected with Dosh, the user gets money back. That money can in turn be paid into your bank account, your PayPal account, toward further purchases or to charity. Dosh itself makes money by taking a cut on each transaction, although it does not provide details of its percentage.
Going forward, the idea will be to continue to expand its business along the same lines by building more technology into the platform to make the offers you are getting more targeted to what you might be most likely to buy, and to use the same tech to increase rewards to entice you to buy things that you may be less likely to naturally buy.
The company’s viewpoint is that a direct cash reward is a much stronger driver for retail intent than advertising can ever be, and because of how Dosh links up with card providers, it’s much easier to see how an offer is linked to an actual purchase.
“When you think about advertising over the years, at first all you had was radio and TV and print with little attribution,” Wuerch said. “Now digital gives you clicks and impressions, but true attribution is when you get to the consummation of the purchase, which is what we are able to show. The tech that we built and continue to build enables us to understand consumers.”
Given the billions that are spent on advertising today, even moving the needle a little to get more retailers working with Dosh on more deals could prove very lucrative to the company… and its investors.
“Dosh’s mission is to put billions of dollars of wasted advertising spend directly into consumers’ pockets,” said Chi-Hua Chien, co-founder and managing partner at Goodwater Capital, which is leading its investment in Dosh. “They are the clear leader in the rapidly growing card-linked offers market and we are confident this latest round of funding will accelerate their achievement of that mission.” (And to be clear, there are many others in the same space of offering cash back on purchases, such as Drop and Ebates.)
Offers are specific to people on the platform. As Wuerch explained it, he and I might both get offers for Sam’s Club cash back, but because he visited the store three days ago and is a very regular visitor, whereas I never go there, we may have very different cashback offers on the table.
Loyalty programs have become a strong driver for how people purchase goods and services. Amazon Prime is perhaps the strongest example of how that is being played out in e-commerce: To keep people using Amazon, under one umbrella, Amazon is offering users free and fast shipping on a range of items, plus access to services that ordinary customers will not get, all for a single monthly fee.
Dosh is taking a very different approach, in that it has “no plans” said Wuerch to sell items directly on its app, instead focusing on leading consumers to physical (or online) retail experiences.
“Our goal is to drive consumers into stores, and we have found that the cash stimulus really does create a change in consumer behavior,” he said.
Today, Dosh is only in the U.S., and Wuerch said that international expansion is likely to come in 2020. Whether that will come by way of organic growth or acquisition remains to be seen. In the U.K., for example, Quidco provides a similar cashback experience to users.