Jan
12
2021
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Gett raises $115M more for its on-demand ride-hailing platform for business users

As ride-hailing companies like Uber and Lyft continue to find their feet in a new landscape for transportation services — where unessential travel is being actively discouraged in many markets, and people remain concerned about catching the coronavirus in restricted, shared spaces — a smaller player that has carved out a place for itself targeting business users is announcing more funding.

Gett, which started out as a more direct competitor to the likes of Uber and Lyft but now focuses mainly on ground transportation services for business clients in major cities around the world, said in a short statement that it has closed a round of $115 million. The company — co-headquartered in London and Israel — also said it is now “operationally profitable” and is hitting its budget targets.

The funding is being led by new backer Pelham Capital Investments Ltd. and also included participation from unnamed existing investors.

Including this round, Gett has now raised $965 million, with past investors including VW, Access and its founder Len BlavatnikKreos, MCI and more. Gett’s last confirmed valuation was $1.5 billion, pegged to a $200 million fundraise in May 2019. It’s not talking about current valuation, or any recent customer numbers, today.

Dave Waiser, Gett’s founder and CEO, described the funding earlier today in a note to me as an extension to the company’s previous round, a $100 million equity investment that it announced in July last year.

Chairman Amos Genish, said in a statement that the funding round was oversubscribed, “which shows the market’s interest in our platform and long term vision. Gett is disrupting and transforming a fragmented market delivering ever-critical cost optimisation and client satisfaction.”

The company has been building out a focus on the B2B market for several years now — a smart way of avoiding the expensive and painful race to compete like-for-like against the Ubers of the world — and this most recent round (which now totals $215 million) is focused on doubling down on that.

The Gett of the past — it was originally founded in 2010 under the name GetTaxi — did indeed try to build a business around both consumers and higher-end users, but the idea behind Gett today is to focus on corporate accounts.

Gett provides those businesses’ employees with a predictable and reliable app-based platform to make it easier to order car services wherever they happen to be traveling, and those businesses — which in the past would have used a fragmented mix of local services — then have a consolidated way of managing, accounting for and analysing those travel expenses. It claims to be able to save companies some 25-40% in costs.

The company previously said that its network covered some 1,500 cities. In certain metropolitan areas like London and Moscow, Gett provides transportation services directly. In markets where it does not have direct operations (such as anywhere in the U.S., including New York), it partners with third parties, such as Lyft.

“We are on a journey to transform corporate ground travel and I’m delighted that investors find our model attractive,” Waiser said in a statement today. “This investment will allow us to further develop our SaaS technology and deepen our proposition within the corporate ground travel market.”

Sep
22
2020
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Uber for Business introduces a couple of commuting options to get to the office during the pandemic

Uber for Business, the business side of the consumer ridesharing service, has typically focused on helping companies track their Uber expenses, but during a pandemic, needs have changed. It’s no longer about getting employees to and from the airport or shuttling an important client from the hotel to the office, it’s about getting essential personnel to the office safely, and to that end, Uber introduced a couple of new business commuting options today.

“Uber for Business is really about how we allow organizations of all shapes and sizes around the world to leverage the great consumer technology that Uber makes available, for business purposes,” Ronnie Gurion, global head at Uber for Business told TechCrunch.

While the business side of the house helps employees charge business-related Uber rides to their employers, it can now help them choose a couple of commuting options beyond the standard ridesharing everyone has access to, regardless of who is paying the bill.

For starters, the company is introducing Employee Group Rides. Group might be an overstatement, as it involves two employees in the same area sharing an Uber for the purpose of getting to or from work. It works in a similar fashion to the way Uber Pool worked, except it only involves matching employees at the same company.

In terms of safety, Gurion says that Uber sees this as a “transit bubble” with employees who are working together anyway willing to share a car together. “We’re seeing that companies are finding this option to be more attractive because they are comfortable putting more than one person in the same office in the same car, when they’re going to be in the same office together anyway, once they get to the office. So, it makes things a little more socially distant or creates a social transit bubble, so to speak, to get people to and from the office,” he explained.

Uber Business Charter in Uber app

Image Credits: Uber

The second option is called Business Charter, and this involves Uber connecting the customer to a third-party fleet partner, who can pick up multiple employees and bring them to the office.

“A company can come and create a commute program with Uber across sedans, SUVs, vans and buses, and based on the employee base and commuting data, it might order 20 sedans and X number of our [larger] vehicles, and decide how to deploy them — and we can do that, and those vehicles will only accept rides from that employer,” Gurion said.

As for commuting during the pandemic, Gurion points out that these programs are being introduced in the EMEA, APAC and North American regions for starters, and that each of these geographies is in different places in terms of COVID. “Not every market looks like the U.S. There are a wide range of situations, but core safety issues are relevant everywhere,” he said.

While Uber has instituted a safety program to help ensure both drivers and passengers are wearing masks, and has devoted $50 million to providing cleaning supplies to drivers, they don’t have a formal testing program in place for drivers, Gurion said. How comfortable employees are with these arrangements will likely depend on individual preferences.

In addition to these commuting options, Uber for Business also offers Uber Eats for Business, a food delivery service geared for business users, and Uber Direct, a package delivery platform.

Apr
28
2020
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SkyCell raises $62M for smart containers and analytics to transport pharmaceuticals

While human travel has become severely restricted in recent months, the movement of goods has remained a constant priority — and in some cases, has become even more urgent. Today, a startup out of Switzerland that builds hardware and operates a logistics network designed to transport one item in particular — pharmaceuticals — is announcing a significant round to fuel its growth.

SkyCell — a designer of “smart containers” powered by software to maintain constant conditions for drugs that need to be kept at strict temperatures, humidity levels, and levels of vibration, which are in turn used to transport pharmaceuticals around the globe on behalf of drug companies — is today announcing. that it has raised $62 million in growth funding.

This latest round is being led by healthcare investor MVM Partners, with participation also from family offices, a Swiss insurance company that declined to be named, as well as previous investors the Swiss Entrepreneurs Fund (managed by Credit Suisse and UBS), and the BCGE Bank’s growth fund.

The company was founded in 2012 Switzerland when Richard Ettl and Nico Ros were tasked to design a storage facility for one of the big Swiss pharma giants. The exec charged with overseeing the project brainstormed that the work they were putting in could potentially be applied to transportation containers, and thus SkyCell was born.

Today, Ettl (who is the CEO, while Ros is the CTO), said in an interview that the company now works with eight of the world’s biggest pharmaceutical companies and has been in validation trials with a further seven. These use SkyCell’s network of some 22,000 air freight pallets to move their products around the world.

The new capital will be used to expand that reach further, specifically in the U.S. and Asia, and to double its fleet to become the biggest pharmaceutical transportation company globally. With 30 of the 50 biggest-selling drugs in the world being temperature sensitive (and some generics for one of the biggest-selling, the arthritis medication Humira, now also coming out), this makes for a huge opportunity.

And unsurprisingly, several of SkyCell’s customers are working on COVID-19 medications, Ettl said, either to help ease symptoms or potentially to vaccinate or eradicate the virus, and so it’s standing at the ready to play a role in getting drugs to where they need to be.

“We are well positioned in case there is a vaccine developed. Out of the six pharma companies developing these right now, four of them are our customers, so there is a high likelihood we would transport something,” Ettl said.

For now, he said SkyCell has been involved in helping to transport “supportive” medications related to the outbreak, such as flu shots to make sure people are not falling ill with other viral infections at the same time.

SkyCell is not disclosing its valuation but we understand that it’s in the many hundreds of millions of dollars. The company had raised some $36 million in equity and debt before this, bringing the total outside funding now to $98 million.

In a market that’s estimated to be worth some $2.8 billion annually and growing at a rate of between 15% and 20% each year, there are a number of freight businesses that focus on the transportation of pharmaceuticals. They include not only freight companies but airlines themselves, which often buy in containers from third parties. (And for some more context, one of its competitors, Envirotainer, was acquired for over $1 billion in 2918; while another, CSafe, has raised significantly more funding.)

But there was virtually no innovation in the market, and most pharmaceutical companies factored in failure rates of between 4% and 12% depending on where the drugs were headed.

One key differentiator with SkyCell has been its containers, which are able to withstand temperatures as high as 60 degrees Celsius or as low as negative 10 degrees Celsius, and have tracking on them to better monitor their movements from A to B.

These came to the market at a time when incumbents were only able to (and some still are only able to) guarantee insulation for temperatures as high as 40 degrees, which was not as pressing an issue in the past as it is today, in part because of rising temperatures around the globe, and in part because of the growing sophistication of pharmaceuticals.

“We’ve found that the number of days where [one has to consider] temperature extremes has been going up,” Ettl said. “Last year, we had 30 days where it was warmer than 40 degrees Celsius across our network of countries.”

On top of the containers themselves, SkyCell has built a software platform that taps into the kind of big data analytics that are now part and parcel of how modern companies in the logistics industry work today, in order to optimise movement and best routing for packages.

The conditions it considers include not only the obvious ones around temperature, humidity and vibration, but distance and time of travel, as well as overall carbon emissions. SkyCell claims that its failure rate comes out at less than 0.1%, with CO2 emissions reduced by almost half on a typical shipment.

Together, the hardware and software are covered by some 100 patents, the company says.

Mar
25
2020
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TripActions lays off hundreds amid COVID-19 travel freeze

The coronavirus demand crunch has taken another bite: Palo Alto-based corporate travel-focused unicorn TripActions has confirmed laying off hundreds of staff.

Per this post on Blind — written by someone with a verified TripActions email address — the company laid off 350 people. Business Insider reported the same figure yesterday, and the Wall Street Journal said the layoffs amount to between one-quarter to one-fifth of the startup’s total staff, citing a person familiar with the situation.

Update: A spokesman for TripActions told us the number of impacted employees impacted is “less than 300” — although he qualified the remark by saying the figure includes 25 people who were offered other roles within the company.

In an earlier email to Crunchbase News TripActions confirmed axing jobs in response to the COVID-19 global health crisis — saying it had “cut back on all non-essential spend.” It did not confirm exactly how many employees it had fired at that point.

“[We] made the very difficult decision to reduce our global workforce in line with the current climate,” TripActions wrote in the statement. “We look forward to when the strength of the global economy and business travel inevitably return and we can hire back our colleagues to rejoin us in our mission to make business travel effortless for our customers and users.”

“This global health crisis is unlike anything we’ve ever seen in our lifetimes, and our hearts go out to everyone impacted around the world, including our own customers, partners, suppliers and employees,” it added. “The coronavirus has had [a] wide-reaching effect on the global economy. Every business has been impacted including TripActions. While we were fortunate to have recently raised funding and secured debt financing, we are taking appropriate steps in our business to ensure we are here for our customers and their travelers long into the future.”

Per the post on Blind, TripActions is providing one week of severance to sacked staff and medical cover until end of month. “With [the coronavirus pandemic] going on you think they would do better,” the OP wrote. The layoffs were made by Zoom call, they also said.

However TripActions’ spokesman disputed the details about severance and medical cover, saying it is offering severance packages for U.S. employees that include two months of company-paid COBRA health insurance coverage, extending health benefits through the end of June, along with a minimum of 3 weeks salary.

He added that U.S. employees who were given notice yesterday were told their last day would be April 1, 2020 — meaning their health benefits continue through the end of April.

Travel startups are facing an unprecedented nuclear winter as demand has fallen off a cliff globally — with little prospect of a substantial change to the freeze on most business travel in the coming months as rates of COVID-19 infections continue to grow exponentially outside China.

However, TripActions is one of the highest valued and best financed of such startups, securing a $500 million credit facility for a new corporate product only last month. At the time, Crunchbase recorded $480 million in tracked equity funding for the company, including a $250M Series D TripActions raised in June from investors including a16z, Group 11, Lightspeed and Zeev Ventures.

Before the layoffs, the company had already paused all hiring, per one former technical sourcer for the company writing on LinkedIn.

This post was updated with additional comment from TripActions

Feb
04
2020
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Layoffs hit Flexport, another SoftBank-backed startup worth $3.2B

Fearing weak fundraising options in the wake of the WeWork implosion, late-stage startups are tightening their belts. The latest is another Softbank-funded company, joining Zume Pizza (80 percent of staff laid off), Wag (80 percent),  Fair (40%), Getaround (25 percent), Rappi (6 percent), and Oyo (5 percent) that have all cut staff to slow their burn rate and reduce their funding needs. Now freight forwarding startup Flexport is laying off 3 percent of its global staff.

“We’re restructuring some parts of our organization to move faster and with greater clarity and purpose. With that came the difficult decision to part ways with around 50 employees” a Flexport spokesperson tells TechCrunch after we asked today if it had seen layoffs like its peers.

Flexport CEO Ryan Petersen

Flexport had raised a $1 billion Series D led by SoftBank at a $3.2 billion valuation a year ago, bringing it to $1.3 billion in funding. The company helps move shipping containers full of goods between manufacturers and retailers using digital tools unlike its old-school competitors.

“We underinvested in areas that help us serve clients efficiently, and we over-invested in scaling our existing process when we actually needed to be agile and adaptable to best serve our clients, especially in a year of unprecedented volatility in global trade,” the spokesperson explained.

Flexport still had a record year, working with 10,000 clients to finance and transport goods. The shipping industry is so huge that it’s still only the seventh largest freight forwarder on its top Trans-Pacific Eastbound leg. The massive headroom for growth plus its use of software to coordinate supply chains and optimize routing is what attracted SoftBank.

Flexport Dashboard

The Flexboard Platform dashboard offers maps, notifications, task lists, and chat for Flexport clients and their factory suppliers.

But many late-stage startups are worried about where they’ll get their next round after taking huge sums of cash from SoftBank at tall valuations. As of November, SoftBank had only managed to raise about $2 billion for its Vision Fund 2 despite plans for a total of $108 billion, Bloomberg reported. LPs were partially spooked by SoftBank’s reckless investment in WeWork. Further layoffs at its portfolio companies could further stoke concerns about entrusting it with more cash.

Unless growth-stage startups can cobble together enough institutional investors to build big rounds, or other huge capital sources like sovereign wealth funds materialize for them, these startups might not be able to raise enough to keep rapidly burning. Those that can’t reach profitability or find an exit may face down-rounds that can come with onerous terms, trigger talent exodus death spirals, or just not provide enough money.

Flexport has managed to escape with just 3 percent layoffs for now. Being proactive about cuts to reach sustainability may be smarter than gambling that one’s business or the funding climate with suddenly improve. But while other SoftBank startups had to spend tons to edge out direct competitors or make up for weak on-demand service margins, Flexport at least has a tried and true business where incumbents have been asleep at the wheel.

Sep
13
2019
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Ten questions for 2020 presidential candidate John Delaney

In November 2020, America will go to the polls to vote in perhaps the most consequential election in a generation. The winner will lead the country amid great social, economic and ecological unrest. The 2020 election will be a referendum on both the current White House and the direction of the country at large.

Nearly 20 years into the young century, technology has become a pervasive element in all of our lives, and will continue to only grow more important. Whoever takes the oath of office in January 2021 will have to answer some difficult questions, raging from an impending climate disaster to concerns about job loss at the hands of robotics and automation.

Many of these questions are overlooked in day to day coverage of candidates and during debates. In order to better address the issues, TechCrunch staff has compiled a 10-part questionnaire across a wide range of tech-centric topics. The questions have been sent to national candidates, regardless of party. We will be publishing the answers as we receive them. Candidates are not required to answer all 10 in order for us to publish, but we will be noting which answers have been left blank.

First up is former Congressman John Delaney. Prior to being elected to Maryland’s 6th Congressional District, Delaney co-founded and led healthcare loan service Health Care Financial Partners (HCFP) and  commercial lender CapitalSource. He was elected to Congress in 2013, beating out a 10-term Republican incumbent. Rumored to be running against Maryland governor Larry Hogan for a 2018 bid, Delaney instead announced plans to run for president in 2020.

1. Which initiatives will you prioritize to limit humankind’s impact on climate and avoid potential climate catastrophe?

My $4 trillion Climate Plan will enable us to reach the goal of net zero emissions by 2050, which the IPCC says is the necessary target to avoid the worst effects of climate change. The centerpiece of my plan is a carbon-fee-and-dividend that will put a price on carbon emissions and return the money to the American people through a dividend. My plan also includes increased federal funding for renewable energy research, advanced nuclear technologies, direct air capture, a new Climate Corps program, and the construction of the Carbon Throughway, which would transport captured carbon from all over the country to the Permian Basin for reuse and permanent sequestration.

2. What is your plan to increase black and Latinx startup founders’ access to funding?

As a former entrepreneur who started two companies that went on to be publicly traded, I am a firm believer in the importance of entrepreneurship. To ensure people from all backgrounds have the support they need to start a new business, I will create nonprofit banks to serve economically distressed communities, launch a new SBIC program to help provide access to capital to minority entrepreneurs, and create a grant program to fund business incubators and accelerators at HBCUs. Additionally, I pledge to appoint an Entrepreneurship Czar who will be responsible for promoting entrepreneurship-friendly policies at all levels of government and encouraging entrepreneurship in rural and urban communities that have been left behind by venture capital investment.

3. Why do you think low-income students are underrepresented in STEM fields and how do you think the government can help fix that problem?

I think a major part of the problem is that schools serving low-income communities don’t have the resources they need to provide a quality STEM education to every student. To fix that, I have an education plan that will increase investment in STEM education and use Title I funding to eliminate the $23 billion annual funding gap between predominantly white and predominantly black school districts. To encourage students to continue their education after they graduate from high school and ensure every student learns the skills they need, my plan also provides two years of free in-state tuition and fees at a public university, community college, or technical school to everyone who completes one year of my mandatory national service program.

4. Do you plan on backing and rolling out paper-only ballots or paper-verified election machines? With many stakeholders in the private sector and the government, how do you aim to coordinate and achieve that?

Making sure that our elections are secure is vital, and I think using voting machines that create a voter-verified paper record could improve security and increase voters’ confidence in the integrity of our elections. To address other facets of the election security issue, I have proposed creating a Department of Cybersecurity to help protect our election systems, and while in Congress I introduced election security legislation to ensure that election vendors are solely owned and controlled by American citizens.

5. What, if any, federal regulation should be enacted for autonomous vehicles?

I was proud to be the founder of the Congressional Artificial Intelligence Caucus, a bipartisan group of lawmakers dedicated to understanding the impacts of advances in AI technology and educating other legislators so they have the knowledge they need to enact policies that ensure these innovations benefit Americans. We need to use the legislative process to have a real conversation involving experts and other stakeholders in order to develop a comprehensive set of regulations regarding autonomous vehicles, which should include standards that address data collection practices and other privacy issues as well as more fundamental questions about public safety.

6. How do you plan to achieve and maintain U.S. superiority in space, both in government programs and private industry?

Space exploration is tremendously important to me as a former Congressman from Maryland, the home of NASA’s Goddard Space Flight Center, major space research centers at the University of Maryland, and many companies that develop crucial aerospace technologies. As president, I will support the NASA budget and will continue to encourage innovation in the private sector.

7. Increased capital in startups founded by American entrepreneurs is a net positive, but should the U.S. allow its businesses to be part-owned by foreign governments, particularly the government of Saudi Arabia?

I am concerned that joint ventures between U.S. businesses and foreign governments, including state-owned enterprises, could facilitate the theft of intellectual property, potentially allowing foreign governments to benefit from taxpayer-funded research. We need to put in place greater protections that defend American innovation from theft.

8. Will U.S.-China technology decoupling harm or benefit U.S. innovation and why?

In general, I am in favor of international technology cooperation but in the case of China, it engages in predatory economic behavior and disregards international rules. Intellectual property theft has become a big problem for American businesses as China allows its companies to steal IP through joint ventures. In theory, U.S.-China collaboration could advance technology and innovation but without proper IP and economic protections, U.S.-China joint ventures and partnerships can be detrimental to the U.S.

9. How large a threat does automation represent to American jobs? Do you have a plan to help train low-skilled workers and otherwise offset job loss?

Automation could lead to the disruption of up to 54 million American jobs if we aren’t prepared and we don’t have the right policies. To help American workers transition to the high-tech, high-skill future economy, I am calling for a national AI strategy that will support public/private AI partnerships, develop a social contract with the communities that are negatively impacted by technology and globalization, and create updated education and job training programs that will help students and those currently in the workforce learn the skills they need.

To help provide jobs to displaced workers and drive economic growth in communities that suffer negative effects from automation, I have proposed a $2 trillion infrastructure plan that would create an infrastructure bank to facilitate state and local government investment, increase the Highway Trust Fund, create a Climate Infrastructure Fund, and create five new matching funds to support water infrastructure, school infrastructure, deferred maintenance projects, rural broadband, and infrastructure projects in disadvantaged communities in urban and rural areas. In addition, my proposed national service program will create new opportunities that allow young adults to learn new skills and gain valuable work experience. For example, my proposal includes a new national infrastructure apprenticeship program that will award a professional certificate proving mastery of particular skill sets for those who complete the program.

10. What steps will you take to restore net neutrality and assure internet users that their traffic and data are safe from manipulation by broadband providers?

I support the Save Net Neutrality Act to restore net neutrality, and I will appoint FCC commissioners who are committed to maintaining a fair and open internet. Additionally, I would work with Congress to update our digital privacy laws and regulations to protect consumers, especially children, from their data being collected without consent.

Jun
12
2019
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Helium launches $51M-funded ‘LongFi’ IoT alternative to cellular

With 200X the range of Wi-Fi at 1/1000th of the cost of a cellular modem, Helium’s “LongFi” wireless network debuts today. Its transmitters can help track stolen scooters, find missing dogs via IoT collars and collect data from infrastructure sensors. The catch is that Helium’s tiny, extremely low-power, low-data transmission chips rely on connecting to P2P Helium Hotspots people can now buy for $495. Operating those hotspots earns owners a cryptocurrency token Helium promises will be valuable in the future…

The potential of a new wireless standard has allowed Helium to raise $51 million over the past few years from GV, Khosla Ventures and Marc Benioff, including a new $15 million Series C round co-led by Union Square Ventures and Multicoin Capital. That’s in part because one of Helium’s co-founders is Napster inventor Shawn Fanning. Investors are betting that he can change the tech world again, this time with a wireless protocol that like Wi-Fi and Bluetooth before it could unlock unique business opportunities.

Helium already has some big partners lined up, including Lime, which will test it for tracking its lost and stolen scooters and bikes when they’re brought indoors, obscuring other connectivity, or their battery is pulled, out deactivating GPS. “It’s an ultra low-cost version of a LoJack” Helium CEO Amir Haleem says.

InvisiLeash will partner with it to build more trackable pet collars. Agulus will pull data from irrigation valves and pumps for its agriculture tech business. Nestle will track when it’s time to refill water in its ReadyRefresh coolers at offices, and Stay Alfred will use it to track occupancy status and air quality in buildings. Haleem also imagines the tech being useful for tracking wildfires or radiation.

Haleem met Fanning playing video games in the 2000s. They teamed up with Fanning and Sproutling baby monitor (sold to Mattel) founder Chris Bruce in 2013 to start work on Helium. They foresaw a version of Tile’s trackers that could function anywhere while replacing expensive cell connections for devices that don’t need high bandwith. Helium’s 5 kilobit per second connections will compete with SigFox, another lower-power IoT protocol, though Haleem claims its more centralized infrastructure costs are prohibitive. It’s also facing off against Nodle, which piggybacks on devices’ Bluetooth hardware. Lucky for Helium, on-demand rental bikes and scooters that are perfect for its network have reached mainstream popularity just as Helium launches six years after its start.

Helium says it already pre-sold 80% of its Helium Hotspots for its first market in Austin, Texas. People connect them to their Wi-Fi and put it in their window so the devices can pull in data from Helium’s IoT sensors over its open-source LongFi protocol. The hotspots then encrypt and send the data to the company’s cloud that clients can plug into to track and collect info from their devices. The Helium Hotspots only require as much energy as a 12-watt LED light bulb to run, but that $495 price tag is steep. The lack of a concrete return on investment could deter later adopters from buying the expensive device.

Only 150-200 hotspots are necessary to blanket a city in connectivity, Haleem tells me. But because they need to be distributed across the landscape, so a client can’t just fill their warehouse with the hotspots, and the upfront price is expensive for individuals, Helium might need to sign up some retail chains as partners for deployment. As Haleem admits, “The hard part is the education.” Making hotspot buyers understand the potential (and risks) while demonstrating the opportunities for clients will require a ton of outreach and slick marketing.

Without enough Helium Hotspots, the Helium network won’t function. That means this startup will have to simultaneously win at telecom technology, enterprise sales and cryptocurrency for the network to pan out. As if one of those wasn’t hard enough.

May
14
2019
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Beyond costs, what else can we do to make housing affordable?

This week on Extra Crunch, I am exploring innovations in inclusive housing, looking at how 200+ companies are creating more access and affordability. Yesterday, I focused on startups trying to lower the costs of housing, from property acquisition to management and operations.

Today, I want to focus on innovations that improve housing inclusion more generally, such as efforts to pair housing with transit, small business creation, and mental rehabilitation. These include social impact-focused interventions, interventions that increase income and mobility, and ecosystem-builders in housing innovation.

Nonprofits and social enterprises lead many of these innovations. Yet because these areas are perceived to be not as lucrative, fewer technologists and other professionals have entered them. New business models and technologies have the opportunity to scale many of these alternative institutions — and create tremendous social value. Social impact is increasingly important to millennials, with brands like Patagonia having created loyal fan bases through purpose-driven leadership.

While each of these sections could be their own market map, this overall market map serves as an initial guide to each of these spaces.

Social impact innovations

These innovations address:

May
13
2019
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Market map: the 200+ innovative startups transforming affordable housing

In this section of my exploration into innovation in inclusive housing, I am digging into the 200+ companies impacting the key phases of developing and managing housing.

Innovations have reduced costs in the most expensive phases of the housing development and management process. I explore innovations in each of these phases, including construction, land, regulatory, financing, and operational costs.

Reducing Construction Costs

This is one of the top three challenges developers face, exacerbated by rising building material costs and labor shortages.

May
13
2019
--

Innovations in inclusive housing

Housing is big money. The industry has trillions under management and hundreds of billions under development.

And investors have noticed the potential. Opendoor raised nearly $1.3 billion to help homeowners buy and sell houses more quickly. Katerra raised $1.2 billion to optimize building development and construction, and Compass raised the same amount to help brokers sell real estate better. Even Amazon and Airbnb have entered the fray with high-profile investments.

Amidst this frenetic growth is the seed of the next wave of innovation in the sector. The housing industry — and its affordability problem — is only likely to balloon. By 2030, 84% of the population of developed countries will live in cities.

Yet innovation in housing lags compared to other industries. In construction, a major aspect of housing development, players spend less than 1% of their revenues on research and development. Technology companies, like the Amazons of the world, spend nearly 10% on average.

Innovations in older, highly regulated industries, like housing and real estate, are part of what Steve Case calls the “third wave” of technology. VCs like Case’s Revolution Fund and the SoftBank Vision Fund are investing billions into what they believe is the future.

These innovations are far from silver bullets, especially if they lack involvement from underrepresented communities, avoid policy and ignore distributive questions about who gets to benefit from more housing.

Yet there are hundreds of interventions reworking housing that cannot be ignored. To help entrepreneurs, investors and job seekers interested in creating better housing, I mapped these innovations in this package of articles.

To make sense of this broad field, I categorize innovations into two main groups, which I detail in two separate pieces on Extra Crunch. The first (Part 1) identifies the key phases of developing and managing housing. The second (Part 2) section identifies interventions that contribute to housing inclusion more generally, such as efforts to pair housing with transit, small business creation and mental rehabilitation.

Unfortunately, many of these tools don’t guarantee more affordability. Lowering acquisition costs, for instance, doesn’t mean that renters or homeowners will necessarily benefit from those savings. As a result, some tools likely need to be paired with others to ensure cost savings that benefit end users — and promote long-term affordability. I detail efforts here so that mission-driven advocates as well as startup founders can adopt them for their own efforts.


Topics We Explore

Today:

Coming Tomorrow:

  • Part 2. Other contributions to housing affordability
    • Social Impact Innovations
    • Landlord-Tenant Tools
    • Innovations that Increase Income
    • Innovations that Increase Transit Accessibility and Reduce Parking
    • Innovations that Improve the Ability to Regulate Housing
    • Organizations that Support the Housing Innovation Ecosystem
    • This Is Just the Beginning
    • I’m Personally Closely Watching the Following Initiatives
    • The Limitations of Technology
    • Move Fast and Protect People


Please feel free to let me know what else is exciting by adding a note to your LinkedIn invite here.

If you’re excited about this topic, feel free to subscribe to my future of inclusive housing newsletter by viewing a past issue here.

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