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VCs reload ahead of the election as unicorns power ahead

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This is The TechCrunch Exchange, a newsletter that goes out on Saturdays, based on the column of the same name. You can sign up for the email here.

It was an active week in the technology world broadly, with big news from Facebook and Twitter and Apple. But past the headline-grabbing noise, there was a steady drumbeat of bullish news for unicorns, or private companies worth $1 billion or more.

A bullish week for unicorns

The Exchange spent a good chunk of the week looking into different stories from unicorns, or companies that will soon fit the bill, and it’s surprising to see how much positive financial news there was on tap even past what we got to write about.

Databricks, for example, disclosed a grip of financial data to TechCrunch ahead of regular publication, including the fact that it grew its annual run rate (not ARR) to $350 million by the end of Q3 2020, up from $200 million in Q2 2019. It’s essentially IPO ready, but is not hurrying to the public markets.

Sticking to our theme, Calm wants more money for a huge new valuation, perhaps as high as $2.2 billion which is not a surprise. That’s more good unicorn news. As was the report that “India’s Razorpay [became a] unicorn after its new $100 million funding round” that came out this week.

Razorpay is only one of a number of Indian startups that have become unicorns during COVID-19. (And here’s another digest out this week concerning a half-dozen startups that became unicorns “amidst the pandemic.”)

There was enough good unicorn news lately that we’ve lost track of it all. Things like Seismic raising $92 million, pushing its valuation up to $1.6 billion from a few weeks ago. How did that get lost in the mix?

All this matters because while the IPO market has captured much attention in the last quarter or so, the unicorn world has not sat still. Indeed, it feels that unicorn VC activity is the highest we’ve seen since 2019.

And, as we’ll see in just a moment, the grist for the unicorn mill is getting refilled as we speak. So, expect more of the same until something material breaks our current investing and exit pattern.

Market Notes

What do unicorns eat? Cash. And many, many VCs raised cash in the last seven days.

A partial list follows. It could be that investors are looking to lock in new funds before the election and whatever chaos may ensue. So, in no particular order, here’s who is newly flush:

All that capital needs to go to work, which means lots more rounds for many, many startups. The Exchange also caught up with a somewhat new firm this week: Race Capital. Helmed by Alfred Chuang, formerly or BEA who is an angel investor now in charge of his own fund, the firm has $50 million to invest.

Sticking to private investments into startups for the moment, quite a lot happened this week that we need to know more about. Like API-powered Argyle raising $20 million from Bain Capital Ventures for what FinLedger calls “unlocking and democratizing access to employment records.” TechCrunch is currently tracking the progress of API-led startups.

On the fintech side of things, M1 Finance raised $45 million for its consumer fintech platform in a Series C, while another roboadvisor, Wealthsimple, raised $87 million, becoming a unicorn at the same time. And while we’re in the fintech bucket, Stripe dropped $200 million this week for Nigerian startup Paystack. We need to pay more attention to the African startup scene. On the smaller end of fintech, Alpaca raised $10 million more to help other companies become Robinhood.

A few other notes before we change tack. Kahoot raised $215 million due to a boom in remote education, another trend that is inescapable in 2020 as part of the larger edtech boom (our own Natasha Mascarenhas has more).

Turning from the private market to the public, we have to touch on SPACs for just a moment. The Exchange got on the phone this week with Toby Russell from Shift, which is now a public company, trading after it merged with a SPAC, namely Insurance Acquisition Corp. Early trading is only going so well, but the CEO outlined for us precisely why he pursued a SPAC, which was actually interesting:

  • Shift could have gone public via an IPO, Russell said, but prioritized a SPAC-led debut because his firm wanted to optimize for a capital raise to keep the company growing.
  • How so? The private investment in public equity (PIPE) that the SPAC option came with ensured that Shift would have hundreds of millions in cash.
  • Shift also wanted to minimize what the CEO described as market risk. A SPAC deal could happen regardless of what the broader markets were up to. And as the company made the choice to debut via a SPAC in April, some caution, we reckon, may have made some sense.

So now Shift is public and newly capitalized. Let’s see what happens to its shares as it gets into the groove of reporting quarterly. (Obviously, if it flounders, it’s a bad mark for SPACs, but, conversely, successful trading could lead to a bit more momentum to SPAC-mageddon.)

A few more things and we’re done. Unicorn exits had a good week. First, Datto’s IPO continues to move forward. It set an initial price this week, which could value it above $4 billion. Also this week, Roblox announced that it has filed to go public, albeit privately. It’s worth billions as well. And finally, DoubleVerify is looking to go public for as much as $5 billion early next year.

Not all liquidity comes via the public markets, as we saw this week’s Twilio purchase of Segment, a deal that The Exchange dug into to find out if it was well-priced or not.

Various and Sundry

We’re running long naturally, so here are just a few quick things to add to your weekend mental tea-and-coffee reading!

Next week we are digging more deeply into Q3 venture capital data, a foretaste of which you can find here, regarding female founders, a topic that we returned to Friday in more depth.

Alex

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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Review: iPad Air, smooth criminal

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The 2020 iPad Air comes at an interesting time in Apple’s release cycle. The iPad Pro is still strong from a specs perspective but is now technically a half generation or so behind in CPU. The new pro models won’t arrive for (theoretical) months. 

So what you end up with is a device that shares the design philosophy of the iPad Pro and inherits some of its best features while simultaneously leaping ahead of it in raw compute power. This makes the Air one of the better overall values in any computing device from Apple in some time. In fact, it’s become obvious that this is my top choice to recommend as a casual, portable computer from Apple’s entire lineup including the MacBooks. 

The clean new design has a thin, pleasantly colored simplicity to it. It matches the new iPhone 12 aesthetic quite well. The smoothly bullnosed corners and dusty blue peened finish make this one of the better looking iPads since the original. For years, Apple moved to try to “pull” the casing of the iPads around the back, making it disappear. This new design is a nice balance between the original’s frank simplicity and the new iPad Pro direction. A bit less sharp-edged and a bit more ‘friendly’ while still crisp.

One thing that I love a lot about the Air is that it lives up to its name and clocks in at the lightest weight of any of Apple’s portables at 1.0lb flat. This plus the Magic Keyboard is just such a killer portable writing machine it’s wild. 

Apple didn’t fix the camera position on this, something that still stinks about the iPad Pro because you have to use Face ID to unlock it and your hand is always in the way in landscape mode. Instead, they straight up ditched the entire True Depth camera and Face ID altogether and tucked Touch ID into the power button.

The initial scanning process to set up a finger seemed ever so slightly more reluctant to grab my fingerprint here than it used to on the home button. My guess is that it’s to do with the oblong shape of the sensor or its housing. But once it was scanned and input, I’m happy to report that it works exactly as well if not better than any iPhone home button version. I set a finger on my left hand here because I only use iPads in horizontal mode. But if you aren’t a keyboard person and are doing a lot of reading, the right hand would be appropriate. 

I actually found this to be a more natural feeling activation gesture than swiping up only to remember that my hand is in the way and having to move it and look at the camera. If the camera was placed along the horizontal edge of the iPad Pro or even in the corner I might feel differently. But as a compromise so that Apple doesn’t have to ship a True Depth camera in this unit, it works plenty fine. 

The surface of the Touch ID button is covered by an opaque sapphire crystal cover that blends well with the casing but allows the print to be read through it. 

Once you have the iPad Air unlocked, it falls right into the ‘X’ style navigation system. Swipes to open and navigate and move around. This is great because it brings near parity of navigation across Apple’s device lineup (minus the iPhone SE.)

The camera is fine. Do you shoot pictures on an iPad? Really you do? Wow, interesting, ok. Maybe buy the iPad Pro which has a full LiDAR array, a Wide and an Ultra Wide lens. Great for artists, scanning, reference work etc. On the iPad Air the camera is just fine but is really a formality. It can be used in all of those ways and the quality is on par, but it’s there because it has to be there. 

Those of you that travel with an iPad and an iPhone will be happy to know that you can charge an iPhone from the USB-C port on the iPad Air. And yep, it works fine with USB-C hubs and card readers too.

The iPad Air has 4GB of RAM where the iPad Pro 2020 has 6GB. It has a Liquid Retina display, but no ProMotion 120hz refresh. The lack of ProMotion is unfortunate but understandable. It requires another whole layer of display technology that is quite a bit more expensive. Having gotten used to it now I would say that on a larger screen like this it’s easily the best excuse for spending the extra $150-200 to bump up to the 11” Pro model. It’s just really damn nice. If you’ve never had one, you’ll be a lot less likely to miss this obviously.

But it also has an A14 Bionic chip where the iPad Pro 2020 models are still on the A12Z. Because that ‘Z’ is related to the fact that it has an extended number of graphics cores (8-core CPU/8-core GPU), the performance gap isn’t as big as you’d think.

Though the iPad Air edges out the iPad Pro in single-core performance, the multi-core numbers are essentially on parity. This speaks to the iPad Pro being tuned to handle multiple processes in simultaneous threads for processing images and video. If you’re running Photoshop or Premiere Rush or LumaFusion on an iPad, you want the Pro. For most other uses, you’re gonna be just fine with the Air.

I do really wish that the Air started at 128GB instead of 64GB for the base $599 price. Apple has finally gotten the iPhone to a great place for minimum storage across the lineup, and I wish that the iPad Air matched that. If a ton of space is important to you, it’s important to note that you cannot get anything over 256GB in this unit, unlike the iPad Pro that is offered up to 1TB. 

The two speaker system in the iPad Air is arranged in the much better horizontal array but it’s half the amount that are in the iPad Pro and it shows. It’s a bit less loud overall but honestly the top volume is still way more than you need for typical iPad viewing distance.

Much of what I wrote about using Apple’s iPad Pro over the course of 10,000 miles of travel applies directly here. I still find it to be a great experience that, once you’ve adjusted for workflows, is just as powerful as any laptop. The additional features that have shipped in iOS 14 since that review have only made the iPad a better platform for legitimate work. 

And now you get the Gen 2 pencil and the fantastic Magic Keyboard in an iPad outside of the Pro lineup and it honestly adds a ton of the utility. 

Here’s my advice: Buy this if you want a portable iPad Pro to use alongside a MacBook or desktop computer for those times you don’t want to carry or can’t carry it. If you want an iPad Pro as your only computer, get the big iPad Pro but probably wait until they update that one in a few months.

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Adobe’s Project Sharp Shots uses AI to deblur your videos with one click

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Every year at its MAX user conference, Adobe shows off a number of research projects that may or may not end up in its Creative Cloud apps over time. One new project that I hope we’ll soon see in its video apps is Project Sharp Shots, which will make its debut later today during the MAX Sneaks event. Powered by Adobe’s Sensei AI platform, Sharp Shots is a research project that uses AI to deblur videos.

Shubhi Gupta, the Adobe engineer behind the project, told me the idea here is to deblur a video — no matter whether it was blurred because of a shaky camera or fast movement — with a single click. In the demos she showed me, the effect was sometimes relatively subtle, as in a video of her playing ukulele, or quite dramatic, as in the example of a fast-moving motorcycle below.

With Project Sharp Shots, there’s no parameter tuning and adjustment like we used to do in our traditional methods,” she told me. “This one is just a one-click thing. It’s not magic. This is simple deep learning and AI working in the background, extracting each frame, deblurring it and producing high-quality deblurred photos and videos.”

Image Credits: AdobeGupta tells me the team looked at existing research on deblurring images and then optimized that process for moving images — and then optimized that for lower-memory usage and speed.

It’s worth noting that After Effects already offers some of these capabilities for deblurring and removing camera shake, but that’s a very different algorithm with its own set of limitations.

This new system works best when the algorithm has access to multiple related frames before and after, but it can do its job with just a handful of frames in a video.

Image Credits: Adobe

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Syte, an e-commerce visual search platform, gets $30 million Series C to expand in the U.S. and Asia

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Syte’s cofounders, chief executive Ofer Freyman, chief revenue officer Lihi Pinto-Fryman and chief operating officer Idan Pinto

Syte’s cofounders, chief executive Ofer Freyman, chief revenue officer Lihi Pinto-Fryman and chief operating officer Idan Pinto

Tel Aviv-based visual search and product discovery platform Syte, already used by brands like Farfetch and Fashion Nova, plans to expand in the United States and Asia-Pacific region after its latest funding. The startup announced today it has raised a $30 million Series C, with an additional $10 million in debt.

The round was led by Viola Ventures, with participation from LG Tech Ventures, La Maison, MizMaa Ventures, Kreos Capital, and returning investors Magma, Naver Corporation, Commerce Ventures, Storm Ventures, Axess Ventures, Remagine Media Ventures and KDS Media Fund. Syte’s last round of funding, a $21.5 million Series B, was announced in September 2019. The startup has now raised a total of $71 million.

Launched in 2015 to focus on visual search for clothing, Syte’s technology now covers other verticals like jewelry and home decor, and is used by brands including Farfetch, Fashion Nova, Castorama and Signet Jewelers. Syte says that its solutions can increase conversion by 177% on average.

The company’s platform includes three main products: Visual Discovery to let brands add camera search, recommendation engines and discovery buttons; “Searchendising,” which automatically generates tags based on visual AI to improve search and recommendation results; and a Discovery Marketplace used by publishers, smart devices manufacturers and social platforms to increase the reach of product advertisements.

Since the beginning of 2020, Syte says its customer base has grown 38%, partly because of the increase in e-commerce traffic caused by COVID-19 movement restrictions.

In the company’s press announcement, chief executive officer and co-founder Ofer Fryman said Syte will focus on developing or acquiring product discovery technology “spanning the full range of our senses—visual, text, voice, and more” to create types of personalized recommendations.

A lot of Syte’s current customers are in Europe, the Middle East and Africa, so its new funding is also earmarked to increase its presence in the U.S. and Asia-Pacific markets.

More social media platforms and e-commerce platforms, including Amazon, Target, IKEA, Walmart, eBay, Snap, and Pinterest, are using visual search and recognition technology to give users an alternative to keyword searches. By simplifying the search process or automatically generating tags, visual recognition technology can help improve search results and product recommendations, resulting in more conversions.

There is a roster of other companies that are also working on AI-based visual recognition and search technology for e-commerce. Other startups in the same space that have raised venture capital funding include Donde Search, ViSenze and Slyce.

Gal Fontyn, Syte’s vice president of marketing, told TechCrunch that it differentiates with visual AI algorithms developed by co-founder and chief technology officer Helge Voss, who previously worked as a physicist at CERN (the European Organization for Nuclear Research).

Voss’ background in neural networks and machine learning allowed Syte to build a visual search solution that can produce results with over 95% accuracy in object-matching within less than a second, Fontyn said. Its algorithms have also been trained on millions of products from vendors around the world, which Syte claims gives it the “largest vertical-specific lexicon in the industry.” This is what allows it to recognize several objects within an image, and assign them detailed tags.

Brands that use Syte see a 423% increase on average on ROI, Fontyn added.

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