Indonesia’s Kargo comes out of stealth with $7.6M from Travis Kalanick, Sequoia and others

Travis Kalanick may be busy cooking up a cloud kitchen business, but that hasn’t stopped the former Uber CEO’s VC fund from making its first investment in Southeast Asia. 10100, the firm that Kalanick launched last year for investments in Asia, just took part in a $7.6 million seed round for Kargo, an early-stage ‘Uber for trucks’ startup that is based in Indonesia and — you guessed it — founded by a former Uber Asia executive.

Kargo takes some of the concepts behind Uber and applies them to trucking and logistics. That’s to say that business customers order trucks using a mobile app or website but the scope is wider, Kargo CEO and co-founder Tiger Fang told TechCrunch.

The goal is to remove middlemen who broker logistics and trucking deals to provide greater transparency, better quality service and improved financials for clients and those operating the services — so cheaper pricing for companies and a larger share of the revenue for those actually out driving. So rather than being subject to closed discussions and chains of brokers, each taking their cut, Kargo wants to offer a direct connection.

“This is a huge opportunity,” Fang said in an interview. “We’ve been looking at what types of problems we can go and solve [since the Uber-Grab deal]… starting another e-commerce startup was probably not the best idea.

“We hope we can lower the price for shippers and raise the earnings from shippers and transporters,” he added. “We think there are hundreds of thousands of smaller companies who all get their hobs from agents and middleman.”

Fang — whose stint at Uber included time in the U.S, launches across Southeast Asia and managing its business in Chengdu, once the company’s busiest city on the planet based on daily trip volume — started Kargo late last year with Yodi Aditya, its CTO, following “months” of research after Uber sold its local business to Grab . They went on to close the financing deal before the end of 2018 and launch in beta early this year.

Operationally, Fang said Kargo is currently piloting with “a couple of big FMG companies” while, on the supply side, it has access to “thousands” of trucks. The initial focus is strictly on FMCG, he added, because each industry and segment requires different types of trucks.

As those figures suggest, Kargo is in its early stages and that makes a $7.6 million seed round pretty notable. Yes, valuations and rounds have been ratcheted up in Southeast Asia, where investors and tech companies see potential as internet access grows among the region’s 600 million-plus consumers, but this is a large check for a venture that is literally just kicking off. But that’s not all, the caliber of the backers is also quite unlike your average seed deal.

Kalanick’s 10100 firm is participating, but the round is led by Sequoia India and Southeast Asia, which announced its new $695 million fund six months ago and has since added an early-stage accelerator program. Other names involved including China’s Zhenfund, Indonesia-focused Intudo Ventures, a personal investment from Patrick Walujo — co-founder of Indonesian hedge fund group North Star — ATM Capital, Innoven Capital and Agaeti Ventures from Indonesian businessman Pandu Sjahrir.

Kalanick is, in many ways, the headline investor given his profile and connections to Fang and others at Kargo. TechCrunch understands that Kalanick agreed to invest last year when he visited Southeast Asia on a trip that combined hiring for his CloudKitchens startup and more generally catching up with the Uber alumni in Asia.

Fang declined to comment on the circumstances, but he said Kalanick “has been a big mentor” to him.

Clearly, a lot of the interest in Kargo stems from the team’s credentials — Fang said a large chunk of Kargo’s 50 person team are ex-Uber Asia — but there are also promising examples of what Kargo is doing in other parts of the world.

China’s two trucking platform unicorns which merged to create Full Truck Alliance Group, a startup reportedly valued at $10 billion that counts Google and SoftBank among its investors, while in India, Blackbuck is reportedly raising at an $800 million valuation. It’s logical, then, that Indonesia — the world’s fourth largest population and Southeast Asia’s largest economy — would also come under the radar, and Fang believes that his team is ideally suited to go after the problem.

The focus is entirely on Indonesia for now, where Fang believes logistics accounts for close to one-quarter of the national $1 trillion GDP, but further down the line he anticipates that there will be expansions across Southeast Asia and potentially beyond.

“We definitely want to build a global company,” he said.

Uber had a tough run in Indonesia. Taxi drivers and those with interests in the industry staged often-violent demonstrations in protest at this ‘foreign’ entrant that posed a threat to their businesses and financial returns. Trucking feels a lot like that with decades of inefficiencies in place, and certain parties profiting from those extended chains of deal-making. Like taxis, those who are being disintermediated aren’t likely to take a threat lying down, so it remains to be seen if Fang, and his fellow ex-Uberites, will run into similar conflict in the future. But Kargo is certainly off to a bright start with plenty of money to go out and test its thesis.

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Tech regulation in Europe will only get tougher

European governments have been bringing the hammer down on tech in recent months, slapping record fines and stiff regulations on the largest imports out of Silicon Valley. Despite pleas from the world’s leading companies and Europe’s eroding trust in government, European citizens’ staunch support for regulation of new technologies points to an operating environment that is only getting tougher.

According to a roughly 25-page report recently published by a research arm out of Spain’s IE University, European citizens remain skeptical of tech disruption and want to handle their operators with kid gloves, even at a cost to the economy.

The survey was led by the IE’s Center for the Governance of Change — an IE-hosted research institution focused on studying “the political, economic, and societal implications of the current technological revolution and advances solutions to overcome its unwanted effects.” The “European Tech Insights 2019” report surveyed roughly 2,600 adults from various demographics across seven countries (France, Germany, Ireland, Italy, Spain, The Netherlands, and the UK) to gauge ground-level opinions on ongoing tech disruption and how government should deal with it.

The report does its fair share of fear-mongering and some of its major conclusions come across as a bit more “clickbaity” than insightful. However, the survey’s more nuanced data and line of questioning around specific forms of regulation offer detailed insight into how the regulatory backdrop and operating environment for European tech may ultimately evolve.

Distractions

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Media fragmentation is annoying consumers

Deloitte’s Technology, Media and Telecommunications division published its 13th-annual Digital Media Trends survey, focused on identifying changes in the ways US consumers engage with various types of media.

Led by an independent research firm, the survey had roughly 2,000 consumer respondents across demographics – with the report categorizing respondents based on age (Gen-Z: ages 14-21, Millenials: 22-35, Gen-X: 36-52, Boomers: 53-71, and Matures: 72+).

While already accompanied by a succinct 13-page executive summary, the report can largely be summarized in just a couple of sentences: more people are using streaming or alternative media services than ever before, largely due to more user freedom and customization, though the growing quantity and fragmentation of platforms are becoming more frustrating for users to manage.

The survey results directionally echo already well-discussed dynamics, which we’ve previously dug into such as here, here and here. Instead, the most poignant aspects of the report were not the answers or conclusions themselves, but the immense level of support many of them received.

Somewhat interesting:

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Former Dropbox exec Dennis Woodside joins Impossible Foods as its first President

Former Google and Dropbox executive Dennis Woodside has joined the meat replacement developer Impossible Foods as the company’s first President.

Woodside, who previously shepherded Dropbox through its initial public offering, is a longtime technology executive who is making his first foray into the food business.

The 25-year tech industry veteran most recently served as the chief operating officer of Dropbox, and previously was the chief executive of Motorola Mobility after that company’s acquisition by Google.

“I love what Impossible Foods is doing: using science and technology to deliver delicious and nutritious foods that people love, in an environmentally sustainable way,” Woodside said. “I’m equally thrilled to focus on providing the award-winning Impossible Burger and future products to millions of consumers, restaurants and retailers.”

According to a statement, Woodside will be responsible for the company’s operations, manufacturing, supply chain, sales, marketing, human resources and other functions.

The company currently has a staff of 350 divided between its Redwood City, Calif. and Oakland manufacturing plant.

Impossible Foods now slings its burger in restaurants across the United States, Hong Kong, Macau and Singapore and is expecting to launch a grocery store product later this year.

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GM Cruise snags Dropbox HR head to hire 1,000 engineers by the end of the year

GM Cruise plans to hire 1,000 more engineers over the next nine months, TechCrunch has learned. It’s an aggressive move by the autonomous vehicle technology company to double its size as it pushes to deploy a robotaxi service by the end of the year. Arden Hoffman, who helped scale Dropbox, will leave the file-sharing and storage company to head up human resources at Cruise.

The GM subsidiary is expanding its office space in San Francisco to accommodate the growth. GM Cruise will keep its headquarters at 1201 Bryant Street in San Francisco. The company will also take over Dropbox headquarters at 333 Brannan Street some time this year, a move that will triple Cruise’s office space in San Francisco.

“Arden has made a huge impact on Dropbox over the last four years. She helped build and scale our team and culture to the over 2300 person company we are today, and we‘ll miss her leadership, determination, and sense of humor. While we’re sorry to see her go, we’re excited for her and wish her all the best in this new opportunity to grow the team at Cruise,” a Dropbox spokesperson said in an emailed statement. 

Prior to joining Dropbox, Hoffman was human resources director at Google for three years.

The planned expansion and hiring of Hoffman follows a recent executive reshuffling. GM president Dan Ammann left the automaker in December and became CEO of Cruise. Ammann had been president of GM since 2014, and he was a central figure in the automaker’s 2016 acquisition of Cruise and its integration with GM.

Kyle Vogt,  a Cruise co-founder who was CEO and also unofficially handled the chief technology officer position, is now president and CTO.

Cruise has grown from a small startup with 40 employees to more than 1,000 today at its San Francisco headquarters. It has expanded to Seattle, as well, in pursuit of talent. Cruise announced plans in November to open an office in Seattle and staff it with up to 200 engineers. And with the recent investments by SoftBank and Honda, which has pushed Cruise’s valuation to $14.6 billion, it has the runway to double its staff.

The hunt for qualified people with backgrounds in software engineering, robotics and AI has heated up as companies race to develop and deploy autonomous vehicles. There are more than 60 companies that have permits from the California Department of Motor Vehicles to test autonomous vehicles in the state.

Competition over talent has led to generous, even outrageous, compensation packages and poaching of people with specific skills.

Cruise’s announcement puts more pressure on that ever-tightening pool of talent. Cruise has something that many other autonomous vehicle technology companies don’t — ready amounts of capital. In May, Cruise received a $2.25 billion investment by SoftBank’s vision fund. Honda also committed $2.75 billion as part of an exclusive agreement with GM and Cruise to develop and produce a new kind of autonomous vehicle.

As part of that agreement, Honda will invest $2 billion into the effort over the next 12 years. Honda also is making an immediate and direct equity investment of $750 million into Cruise.

Cruise will likely pursue a dual path of traditional recruitment and acquisitions to hit that 1,000-engineer mark. It’s a strategy Cruise is already pursuing. Last year, Cruise acquired Zippy.ai, which develops robots for last-mile grocery and package delivery, for an undisclosed amount of money. The deal was more of an acqui-hire and did not include any of Zippy’s product or intellectual property. Instead, it seems Cruise was more interested in the skill sets of the co-founders, Gabe Sibley, Alex Flint and Chris Broaddus, and their team.

In 2017, Cruise also acquired Strobe,  a LiDAR sensor maker. At the time, Cruise said Strobe would help it reduce by nearly 100 percent the cost of LiDAR on a per-vehicle basis.

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