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App spending to reach $270B by 2025, new forecast predicts

Published February 22, 2021

A new market forecast predicts app spending will reach $270 billion by the year 2025, including paid downloads, in-app purchases and subscriptions. According to data from Sensor Tower, in-app spending will return to pre-pandemic levels of stable growth over the next few years, downloads will continue to grow and, perhaps most notably, it’s predicting app store spending in non-game apps will overtake mobile game spending by 2024.

This is a big bet, given that, today, consumers spend twice as much on mobile games than on non-games. The firm, however, believes the subscription model now being adopted by a range of mobile apps will cause a shift in the market. By 2024, it expects non-game spending to reach $86 billion compared with $73 billion in game spending. And by 2025, that gap will widen, with non-games reaching $107 billion while mobile games reach $78 billion.

Image Credits: Sensor Tower

Last year, global consumer spending in the top 100 subscription apps was up by 34%, year-over-year, to give you an idea of the current state of the market. But there were already some indications that subscription growth was being impacted by larger apps, like Netflix and Tinder, which found workarounds to in-app purchases.

What Sensor Tower also can’t predict is how the regulatory environment of the next several years will play out across the app stores. Today, companies like Apple and Google require apps to charge customers for subscriptions via Google and Apple’s own payment mechanisms. But new anti-competition laws could be enacted that would allow publishers to market their own subscriptions inside their apps, which then redirect users to their own channels to make those purchases. Such a change would have an outsized impact on app store subscription growth trends, and, therefore, this forecast.

Though the pandemic pushed in-app spending up by 30% year-over-year to a record $111 billion in 2020, the new forecast predicts general in-app spending will return to pre-COVID levels over the next five years. It says gross revenue across both app stores will climb each year with a 19.5% compound annual growth rate (CAGR) to reach $270 billion by 2025. Of that figure, $185 billion will be App Store spending, versus $85 billion on Google Play.

Image Credits: Sensor Tower

The U.S. will grow slightly slower than the rest of the global market, with a CAGR of 17.7% to reach $74 billion by 2025.

European markets will drive growth in app store spending from 2020 through 2025, led by the U.K. This is not the equivalent to which markets see the most spending in total, but rather is about where growth is taking place — in other words, opportunity for app makers. By 2025, 11 European countries will pass the $1 billion in consumer spending milestone, to collectively reach $42 billion in consumer spend.

Image Credits: Sensor Tower

Downloads, meanwhile, will continue to grow over the next several years, to reach 230 billion by 2025, the forecast predicts, with Google Play accounting for a majority of that figure, with 187 billion global downloads. In the U.S., however, App Store downloads in 2025 (10.6 billion) will top those from Google Play (6.3 billion), the report concludes.

Image Credits: Sensor Tower

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Why I felt fine about not disclosing my pregnancy to investors

Published February 22, 2021
Kathy Hannun
Contributor

Kathy Hannun is president and co-founder of Dandelion Energy. Prior to Dandelion, Kathy worked at X, Google Alphabet’s innovation lab. In May 2017, Kathy launched Dandelion as an independent startup. She graduated from Stanford with a B.S. in Civil Engineering and M.S. in Computer Science.

I closed two major rounds of funding for my geothermal energy startup, Dandelion Energy, while pregnant. I did not disclose either pregnancy to my investors during the fundraising process either time. I felt fine doing this, and I believe other founders should feel free to keep their pregnancies private as well if they’d prefer to.

No one would think twice about a male founder who declined to share the details of his health or family status with investors during an initial fundraising meeting. On the contrary, it would be an unusual move for him to do so.

For some context, my co-founder and I spun our startup, Dandelion Energy, out of Alphabet’s X in April 2017 and raised our first small round of outside funding that summer. Our goal was to set up a commercial pilot and start selling and installing heat pumps to demonstrate that our product worked and show that there was demand for affordable geothermal before we raised a larger round. We had to prove that our business was viable.

No one would think twice about a male founder who declined to share the details of his health or family status with investors during an initial fundraising meeting.

That same summer, in 2017, I became pregnant.

Round one

As summer turned to fall, I had to figure out how to approach being pregnant while raising Dandelion’s second round of funding. I was lucky to be able to choose whether to tell people I was pregnant because it turned out I didn’t end up looking visibly pregnant until about seven months in, and even then I could dress to make it nonobvious. Without knowing anyone who’d gone through a similar experience, I had to decide how I would handle my status as a pregnant person when speaking with investors.

At first, it worried me that I would be hiding something if I didn’t disclose my pregnancy. But I really didn’t want to. I was a first-time entrepreneur with no real track record. Oh yeah, and I was a woman. And almost all of the investors were men who typically funded men.

Especially early on in a startup’s life, these investors are judging the founder as much as the business. Making an impression is key, and “pregnant” didn’t strike me as accretive in any way to my ability to deliver the type of impression that would lead to investment in my business (I hope this changes over time, but I am being honest about how things seemed to me).

And then there was this: Even if I had decided to tell investors I was expecting, how could I broach the topic in a way that wouldn’t threaten to derail the entire tenor of the meeting? I was meeting most of these people for the first time and had a limited amount of time to spend explaining payback periods and vapor compression refrigeration cycles. It seemed like the best-case scenario was if disclosing pregnancy made the meeting no worse than it would otherwise have been. In no world could I imagine it would be a net positive.

Given all of this, I made the decision to not talk about it. It worked out for me. As soon as I started showing, around seven months in, everyone left their offices for the holidays, and so I was never forced to address what was becoming visibly obvious.

But of course there was a downside to my approach. I would have to tell them eventually, and I’d pushed it off so long that by the time I finally got around to it we basically had to have a conversation like this:

Me: “Some happy news to share: I’m pregnant!”

Investors: “Congratulations! We are so thrilled for you! When’s the due date?”

Me: “Ahhh … Next month.”

Happily, all of them were extremely supportive and gracious when I told them. Their uncomplicated and positive acceptance of the news even made me wonder if all my internal wrangling about whether to tell investors had been unnecessary. I gave birth to my daughter literally one day after the money was wired.

Round two

Time passed and it became clear we were ready to raise our next round of funding. Also, I become pregnant again. This time, most of the fundraising happened in the early stages of my pregnancy. Early enough that I hadn’t even really told my friends, so it was obvious to me I wouldn’t be telling investors I was just meeting. After having gone through it once before, it was an easier decision the second time around.

Looking back

Reflecting on my experience, I do think it helped that I got to know my investors throughout the fundraising process, so by the time I told them I was pregnant, they already knew me and I had already established my credibility as an entrepreneur. Being pregnant was just something going on in my life; it didn’t define who I was to them. That is one advantage of introducing it later: It did not define me because they knew so much else about me by that point.

In many ways, I am a stereotypical founder: I have a CS degree from Stanford, I worked as a PM at Google, I have an engineering background. I have many advantages. Yet, more present in my mind during fundraising were the parts of my identity that seemed atypical, and the primary aspect here was my being a woman.

Because there is so much conversation about how women receive so much less investment, I was worried that being a woman would be a disadvantage, and there’s nothing like being pregnant to highlight in the strongest possible way that you’re a woman.

I now feel lucky to know other founders who have raised money while visibly pregnant, and so I’ve seen firsthand that it’s possible. But it is not something that a pregnant founder should feel obligated to disclose. I hope that it becomes common for women to start businesses and raise capital for those businesses in every stage of their lives, including when they’re pregnant.

Because as soon as the pregnant woman and the guy with the hoodie both seem equally probable as startup founders, it will suddenly matter much less whether to talk about your pregnancy.

Startup fundraising is the most tangible gender gap. How can we overcome it?

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Equity Monday: Everyone is going public so what’s wrong with your startup?

Published February 22, 2021

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here — and be sure to check out our last main ep, in which Natasha coins a slogan for a16z that I both hate, and became the headline of the show!

But enough of all of that, we have a lot to get through this morning. Here’s what we talked about:

  • The Weekend: Coinbase at $100 billion? More on that to come. Toast is going public! Probably! Wait, Toast the company that laid off staff last year? Yep that Toast! It’s not toast! And new rules on online lending in China.
  • This Morning: Oscar Health put together an IPO price range that is interesting, and Apex Clearing is going public via a SPAC.
  • Funding Rounds: Gophr raises money! Ageras Group raises money! Promise raises money! It was hard to pick just three, but each of those rounds has something notable about it. Enjoy!
  • Deeper Dive/Riff: If the public markets will float even the most leaden of startup via a SPAC-balloon, any late-stage startup that doesn’t take the ride out of the private markets must either be perfect or too heavy to lift. And if it’s the second, we can write it off? Maybe?

And, finally, this is precisely what I feel like this Monday morning. Chat soon and stay safe!

Equity drops every Monday at 7:00 a.m. PST and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

Equity Monday: The electric car boom, tech regulation and some sad American VC data

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Creatio raises $68M as the low-code space keeps attracting huge checks

Published February 22, 2021

This morning Creatio, a Boston-based software company, announced that it has raised $68 million. Volition Capital, a growth-equity fund, led the round. The deal was a minority investment in the startup.

The deal is notable not merely thanks to its sheer size, but because up until today Creatio had bootstrapped. That’s according to founder and CEO Katherine Kostereva, with whom TechCrunch caught up with last week regarding the investment.

Per Kostereva, her company’s low-code platform helps other companies automate business processes. Creatio’s competitive edge, she said, comes in part from how quickly it can help companies automate; the faster that companies can get from a low-code platform to live apps matters.

Creatio also has a genre focus, namely that it touts its platform’s ability to help automate work in the CRM space — think marketing and sales-related tasks. But its crowning “jewel,” Kostereva said, is Creatio’s underlying low-code automation platform.

The low-code world that Creatio competes in is a broad space that is seeing active investment from the very-early to the very-late stage. For example, last month TechCrunch covered no-code-focused Stacker’s $1.7 million round. And earlier this month TechCrunch wrote about low-code-focused OutSystems’ $150 million raise at a $9.5 billion valuation.

To see another low-code company raise a big check was therefore not too surprising.

Five VCs discuss how no-code is going horizontal across the world’s industries

TechCrunch was curious where the company and its founder came down on the concept of low-code versus no-code, a topic that is always good to ask players in either space. Kostereva highlighted the importance of citizen developers, folks who can use drag-and-drop interfaces to create apps but who are less adept with code. But she added that with today’s no-code tools one can only build simple things. Creatio, she continued, is more focused on the mid-market and enterprise. As such, it’s just not possible for Creatio to go no-code today. But, her view did appear to be that citizen devs should be able to do more and more in time without code.

It’s a fair perspective, and an encouraging one. The more that folks can do sans code, the more power that can shift into the hands of business orgs that traditionally had to depend on other departments for dev lift.

Back to the money side of things; Creatio has historically targeted breakeven financial results, per its CEO. That means it reinvested in itself as it grew, an arrangement that made us curious as to why the company would raise capital now; why change up a working formula?

In short the company was getting itself ready to accelerate, according to its founder. Kostereva said that she wanted Creatio to have “world-class” numbers for metrics like net retention, revenue growth and net promoter score before it took on external funds.

Was the wait worth it? The company’s net retention was 122% last year, and its NPS score is 34, she disclosed. On the growth side of things, Kostereva said that her company started off doubling and tripling and is still close to doubling. Our read of her comments is that Creatio is probably growing its ARR in the high double digits today.

The company wants to use its capital to invest in sales and marketing to help spread the the word about its business, invest in its partner program, a key growth mechanism, and R&D, it said. So, a little bit of everything.

TechCrunch has recently noticed just how big the software world really is, indexing off the fast that there is enough room for a host of OKR-focused startups to grow and raise external capital without weeding out weaker players. Given how many business processes there are in the world to automate, it may be that Creatio and other low-code platforms that want to help other companies accelerate will enjoy similar market dynamics. Investors, at least, are betting like that’s the case.

What’s ahead for no-code and low-code startups?

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Snack, where TikTok meets dating, gets $3.5 million in funding

Published February 22, 2021

After online dating’s tremendous 2020 growth that culminated in last week’s epic Bumble IPO, a new entrant has tossed its hat into the dating app ring.

Snack, founded by Kimberly Kaplan, looks to merge the popularity and format of TikTok with the dating world. Kaplan hails from Plenty of Fish, where she was one of the earliest employees at the dating site. She led product, marketing and revenue and was on the executive team that eventually sold PoF to Match Group for $575 million in 2015.

Kaplan said that she noticed a specific user behavior among folks using dating apps, particularly the coveted Gen Z demographic. Essentially, folks would match on Bumble or Tinder and immediately move the connection over to apps like Snap and Instagram, where they would watch each others’ stories and more casually flirt, rather than carrying on in a more high-pressure DM conversation on the dating apps.

Around the same time, TikTok surged in popularity, showing a shift in the average consumer’s attitude toward creating short-form video on the web.

Snack is a video-first dating app that asks users to create a video and post it to a feed. Other users can scroll through a feed (à la Instagram) rather than swipe right or left on individual profiles, and when someone likes a video, it opens up the ability to comment. Once two users have liked each others’ videos, DMs are open.

The app is still in its early days, so there is no location filtering yet to ensure that everyone who joins the app has a full feed of videos to browse through. Kaplan said that Snack is also working on video editing features similar to that of TikTok to let people get super creative with their profiles.

Thus far, Snack has received $3.5 million in funding, led by Kindred Ventures and Coelius Capital, with participation by Golden Ventures, Garage Capital, Panache Ventures and N49P.

Though we’re still a ways away from monetization, Kaplan says her experience in the dating space should be beneficial when looking to generate revenue at Snack, and that the startup will likely follow the same playbook as other dating apps, employing premium subscriptions and potentially ads.

There are 10 people on the Snack team, and Kaplan says that the team is 60% diverse with 40% of employees being visible minorities.

“The biggest challenge is going up against big players that have a lot of capital,” said Kaplan. “Starting out is hard and getting that initial foothold is hard. I fundamentally believe in our product and I see this open opportunity in the market. I very much believe someone will come in and usurp Tinder, and it’s going to be around video.”

Bumble prices IPO at $43 per share

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Winning enterprise sales teams know how to persuade the Chief Objection Officer

Published February 22, 2021
Oren Yunger
Contributor

Oren Yunger is an investor at GGV Capital, where he leads the cybersecurity vertical and drives investments in enterprise IT, data infrastructure, and developer tools. He was previously chief information security officer at a SaaS company and a public financial institution.
More posts by this contributor

Many enterprise software startups at some point have faced the invisible wall. For months, your sales team has done everything right. They’ve met with a prospect several times, provided them with demos, free trials, documentation and references, and perhaps even signed a provisional contract.

The stars are all aligned and then, suddenly, the deal falls apart. Someone has put the kibosh on the entire project. Who is this deal-blocker and what can software companies do to identify, support and convince this person to move forward with a contract?

I call this person the Chief Objection Officer.

Who is this deal-blocker and what can software companies do to identify, support and convince this person to move forward with a contract?

Most software companies spend a lot of time and effort identifying their potential buyers and champions within an organization. They build personas and do targeted marketing to these individuals and then fine-tune their products to meet their needs. These targets may be VPs of engineering, data leaders, CTOs, CISOs, CMOs or anyone else with decision-making authority. But what most software companies neglect to do during this exploratory phase is to identify the person who may block the entire deal.

This person is the anti-champion with the power to scuttle a potential partnership. Like your potential deal-makers, these deal-breakers can have any title with decision-making power. Chief Objection Officers aren’t simply potential buyers who end up deciding your product is not the right fit, but are instead blockers-in-chief who can make departmentwide or companywide decisions. Thus, it’s critical for software companies to identify the Chief Objection Officers that might block deals and, then, address their concerns.

So how do you identify the Chief Objection Officer? The trick is to figure out the main pain points that arise for companies when considering deploying your solution, and then walk backward to figure out which person these challenges impact the most. Here are some common pain points that your potential customers may face when considering your product.

Change is hard. Never underestimate the power of the status quo. Does implementing your product in one part of an organization, such as IT, force another department, such as HR, to change how they do their daily jobs?

Think about which leaders will be most reluctant to make changes; these Chief Objection Officers will likely not be your buyers, but instead the heads of departments most impacted by the implementation of your software. For example, a marketing team may love the ad targeting platform they use and thus a CMO will balk at new database software that would limit or change the way customer segment data is collected. Or field sales would object to new security infrastructure software that makes it harder for them to access the company network from their phones. The head of the department that will bear the brunt of change will often be a Chief Objection Officer.

Is someone’s job on the line?

Another common pain point when deploying a new software solution is that one or more jobs may become obsolete once it’s up and running. Perhaps your software streamlines and outsources most of a company’s accounts payable processes. Maybe your SaaS solution will replace an on-premise homegrown one that a team of developers has built and nurtured for years.

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Netflix launches ‘Downloads for You,’ a new feature that automatically downloads content you’ll like

Published February 22, 2021

Netflix today is launching a new feature that aims to bring more offline content to users who opt-in automatic downloads. With “Downloads for You” enabled, the Netflix app will download recommended TV shows and movies to your mobile device based on your tastes, as determined by your Netflix watch history.

After turning on the feature for the first time, you’ll be able to select the amount of storage space you want to dedicate to saving these recommended downloads on your device: either 1GB, 3GB or 5GB. The downloads will then take place when you’re connected to a Wi-Fi network, and will contain a mix of recommendations that Netflix believes you’ll like. Typically, the app will download the first few episodes of a TV show — enough to get you started.

You can also cast the downloaded content to a nearby TV, where it will stream directly from your phone.

After you’ve watched the episodes or movies, you can delete them from the device to free up more storage space for the next time you’re connected to Wi-Fi.

Netflix notes its full catalog is available for download, not just its own original content. However, there will be some titles with download limitations due to licensing restrictions.

Image Credits: Netflix

The feature is an addition, not a replacement for Netflix’s existing offline access feature known as Smart Downloads. First launched in 2018 before becoming globally available, Smart Downloads allows users to pick which shows or movies they want to save for offline viewing.

Netflix says it began testing Downloads for You in late 2020, but is today making the feature available to all users worldwide, initially on Android. A version for iOS is in the works and will arrive later this year.

Offline downloads can make sense for those who are traveling — for example, by plane or underground train, where internet access is not a given. But it also makes sense for users in emerging markets, where access to a reliable cellular connection or bandwidth can be a concern.

Netflix’s ‘Shuffle Play’ feature will roll out to all users worldwide this year

During tests, Netflix notes it saw high usage of the feature in the U.S. But it considers the emerging market use case — where Android devices are more heavily used and connections are often unreliable — to be of particular importance. This is especially true for countries like India and Brazil, and elsewhere in the Asia-Pacific region.

“We’re excited to introduce Downloads for You. People who choose this new feature will have shows or movies automatically downloaded to their devices, with recommendations based on their tastes,” said Patrick Flemming, Netflix’s director of Product Innovation, in a statement. “We want to make discovering your next new favorite series or film even easier, whether you’re connected or not.”

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Can data fix healthcare?

Published February 20, 2021

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday morning? Sign up here.

Ready? Let’s talk money, startups and spicy IPO rumors.

Can data fix healthcare?

Not alone, but you might be able to make a lot of progress with the right data in the right hands. And that’s precisely what the startup we’re talking about today is up to.

The Exchange caught up with Terry Myerson and Lisa Gurry this week, the CEO and CMO of Truveta, a young company that wants to collect oodles of data from healthcare providers, anonymize it, aggregate it and make it available to third parties for research.

It’s a big task, but the team behind Truveta has experience with big projects. Myerson is best known for his time one-rung below the top of the Microsoft org chart, where he ran things you might have heard of, like Windows. Gurry was a leader inside that org, most recently working on strategy for the Microsoft Store product.

But now they are at a healthtech data company. How did that come to be? After Myerson left Microsoft he worked with Madrona, the Seattle-area venture capital firm, and the Carlyle Group, a huge investing group with a taste for private equity. A few years later, several former Microsoft co-workers of Myerson had wound up at Providence, a healthcare giant. They reached out to Myerson around when COVID-19 was first locking down the United States. The former Microsoft exec agreed to take part in a few calls, but didn’t formally join them as he was stuck at home.

During that time he learned that Providence had put together a white paper concerning the idea that Truveta would become, that by collecting data from healthcare providers a dataset of sufficient size and diversity could be compiled to allow research of all sorts to leverage it. Myerson got stuck on the concept, later founding the company. Then he called up some former colleagues, including Gurry, to help him build it.

Truveta has around 50 people today and will scale to around 100 this year, Myerson said.

Questions abound in your head, I’m sure. Things are still early at Truveta, but the company announced last week that it has signed up 14 healthcare providers to help with its data goals. Those firms are also investors in the company (Myerson put in capital in as well).

I was curious about the company’s business plan. Per Myerson, Truveta will charge different rates depending on who wants to access its data. As you can imagine, commercial entities will pay a different price than an independent researcher.

Next for Truveta is getting more data, locking down its internal data schema, collecting feedback from researchers and, later, approaching commercial access.

Healthcare in America is inequitable — something that the pair of Truveta executives stressed during our call — thus giving the company a huge market to improve and make less racist and sexist.

It was a bit odd to talk to Myerson and Gurry about their startup. In the past I’d chatted with them about some of Microsoft’s largest platforms. Let’s see how fast they can transform Truveta from an idea I can’t help but dig, to a company that is a viable commercial concern. And then how big they can grow it.

Market Notes

A lot has happened in the past few days that we couldn’t get to. Adyen’s earnings, for example. The European payments platform reported H2 revenues of €379.4 million, up 28% compared to the year ago half-year. And from that it reported EBITDA of €236.8 million. Who said fintech can’t be profitable? (Note: Adyen’s results are required reading if you care about Stripe’s valuation and future public offering.)

And there were some rounds that also fell through our fingers. Investments like CloudTalk’s recent $7.3 million Series A. The Slovakia-based startup previously raised a $1.6 million seed round in 2019. The startup, as its name suggests, offers cloud telephony services to call centers.

We suspected that CloudTalk probably had a pretty good year in 2020 thanks to global growth in remote work. It did. In an email, CloudTalk said that it has not seen “Zoom-like [growth] figures” but that in 2020 demand for its services “exceeded [its] expectations.” That helps explain its latest round.

The Exchange was also curious if the company had a perspective on subscription pricing versus consumption pricing, a rising topic amongst software dorks such as myself (more to come on this next week with notes from Appian, Fastly and others). Per the company, CloudTalk charges “for both seats and for usage,” making it a hybrid company from a pricing perspective. CloudTalk called its pricing setup “a good balance for both parties because customers like to know what they are going to be paying ahead of time.”

It’s a startup to keep in mind. As is Zolve, a globally themed neobank with a focus on helping expats have a working financial world. I couldn’t get to it, but TechCrunch wrote it up. More here.

And in case you didn’t have time to watch television during work the last few days let’s talk about Robinhood. Which enjoyed a Congressional hearing this week that was mostly dull apart from some notes on the fintech giant’s business model.

Finally, it was a busy week for crowded startup niches. There was more money for OKR startups, leading to our question about VCs putting capital into related companies in the future. Public also raised several hundred million dollars. Because why not. And low-code player OutSystems raised $150 million to round out the group. It was one hell of a week.

Various and Sundry

I will leave you with a few data points. First, that Clubhouse’s metrics are finally starting to match the hype around the product. People are showing up in droves, pushing its total download figures over the 10 million mark.

And in news that I missed, Substack crossed the 500,000 subscriber mark. That’s impressive!

And to close, a Chicago-based, home-focused insurtech startup called Kin crossed the $10 billion “total insured property value” mark this week. The Exchange reached out, asking the company about its economics. After all it’s not hard to run up premium volume if you are selling dollars for 50-cent pieces.

Ruth Awad from the company responded that her company’s “ loss rate is 53% and our gross margins are 32%.” Not bad at all. Given how quickly insurtech has gone from experiment to public-success, Kin is a company to keep tabs on.

Wrapping, please make sure to support your local heavy metal band this weekend,

Alex

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This Week in Apps: Sneak peek at TikTok shopping, new iOS and Android betas, kids’ app Prodigy hit with FTC complaint

Published February 20, 2021

Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.

The app industry is as hot as ever, with a record 218 billion downloads and $143 billion in global consumer spend in 2020.

Consumers last year also spent 3.5 trillion minutes using apps on Android devices alone. And in the U.S., app usage surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours per day on their mobile devices.

Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus. In 2020, investors poured $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year.

This week, we’ve got a first look at one of TikTok’s early e-commerce tests, which involves a program for sellers involving product anchors on videos and the option for affiliate sales. We’re also digging into the new iOS and Android betas, the FTC complaint against math app Prodigy and more.

Top Stories

TikTok tests a new e-commerce experience in Indonesia

The Financial Times recently reported TikTok was preparing to launch a range of new e-commerce experiences in 2021, including the ability for creators to share links to products, support for affiliate sales, and even livestreamed shopping. Now, we’ve got a first look at some of the live tests around e-commerce that TikTok has in progress.

The company recently launched a “Seller University” website aimed at its Indonesian audience, where it details how brands can advertise their products on video. Here, TikTok explains brands have two ways to advertise, either by making their own videos or by working with affiliates.

“If you choose to sell through your personal page, you can then display products via livestreaming or short videos, with product anchors embedded in your content. When customers view your content, they can be redirected to the corresponding product detail page by clicking on the product anchor,” the site explains.

The Seller University also details other information, like how to sign up to be a TikTok seller and what sort of products are prohibited, along with other rules and guidelines.

Image Credits: TikTok

TikTok Sellers have to provide their contact information, including location, phone, email, shop and warehouse location, and other required documentation to be approved. They can then set up a Seller profile, where they can manage other users associated with their account. Once live as a Seller on the app, they’ll have a “TikTok Shop” on the second tab on their profile, which users can view when they visit the page.

When their videos showing their products are viewed, there are “product anchors” embedded in the content. Clicking on these anchors will redirect the viewer to the product detail page where they can transact. In addition, brands can collaborate with TikTok influencers to promote their products through a new “TikTok Affiliate” program.

Image Credits: TikTok

TikTok told TechCrunch the program is a test of its e-commerce solutions in Indonesia, and one of several product tests in the area of e-commerce.

Consumer advocacy groups file FTC complaint against edtech app Prodigy

A coalition of 20 consumer advocacy groups, led by the Campaign for a Commercial-Free Childhood, have filed an FTC complaint against the popular edtech app Prodigy, which offers a math learning app for web and mobile. The app is designed much like modern-day freemium games, with math “battles” designed to improve math skills, grades and test scores.

The complaint alleges a variety of abuses, including how it aggressively pushes kids using the free version provided to schools to nag parents for the paid $59 annual subscription, which includes a richer gaming experience.

The groups also take issue with the app’s in-app rewards and badges — some of which are only available to paid users, including fancier loot boxes — saying these features cause division between those who pay and those who can’t. And it alleges that Prodigy’s claims about educational improvements don’t hold merit.

In response, Prodigy says it takes the concerns seriously, but over 95% of users play the game for free and the business model involving the paid membership is how free access is provided.

“Without this model, we would be required to put all of our educational content behind a paywall, which contradicts our mission of providing full access to fun and engaging math learning,” a company spokesperson said. “The alternative would be to generate revenue via advertising, which is not a model we believe best benefits or protects our users. We never show third-party ads on our platform, nor do we sell or lease any other user information to third parties,” they noted.

The FTC has stepped up its enforcement over how apps targeting children can behave, with a focus on data collection practices and COPPA violations, which has resulted in fines for apps like TikTok and YouTube. This complaint, however, is not about children’s privacy, but rather how they’re being marketed to via edtech.

Weekly News

Platforms: Apple

Apple rolls out iOS 14.5, beta 2. The update includes a new Apple Music interface with the ability to share lyrics on social and use new swipe gestures; new Shortcuts actions for taking screenshots, setting screen orientation switching between cellular data modes, and more; expanded support for iPad privacy features (in relation to shutting off the microphone); and more than 200 new emoji.

The most notable new emoji include the heart on fire, exhaling face, face in clouds, gender options for people with beards and an updated syringe that removes the blood, making it more useful for conversations about the COVID vaccine.

Image Credits: Emojipedia (opens in a new window)

Apple welcomed the teams from 13 app companies in its inaugural cohort for Apple’s Entrepreneur Camp for Black Founders and Developers. The program focuses on building technical skills and designing a great user experience through sessions, hands-on labs, one-on-ones with Apple experts and engineers, and more. VC firm Harlem Capital will also offer mentorship.

Participants include fitness app B3am, news app Black, music app Bar Exam, 3D photos app Film3D, MIDI Controller app FormKey, healthcare app Health Auto Export, gardening app Hologarden, remote learning solution Hubli (beta testing), game Justice Royale, sneaker enthusiast app Kickstroid, nail art app Nailstry, social app Peek: Movies & TV Shows and music app TuneBend.

Platforms: Google

Google launches the first developer preview of Android 12. The update includes new privacy controls; pre-set password complexity levels of high, medium and low; other improved user experience tools and app compatibility improvements; the ability to transcode media into higher-quality formats like the AV1 image format; transitions and animations for notifications, plus the ability to decorate notifications with custom content; enrollment-specific IDs for employee-owned devices; streamlined credential management for unmanaged devices; an improved screenshot editor; better support for multi-channel audio; Project Mainline improvements; and more.

Google launches the first developer preview of Android 12

Google’s Play Store adds support for Nearby Sharing. The feature allows users to share apps and updates with nearby Android devices.

Google suspended the Trump 2020 app from the Play Store for non-functionality. The app would either hang upon first launch or immediately reported a server error. Google says the app was in violation of its policies around non-functional apps, but the app can return if it’s fixed.

E-commerce

YouTube says it’s now beta testing a new e-commerce shopping experience in the app that allows creators to market products to fans, who can then buy directly on YouTube. The feature, which aims to compete with TikTok’s growing shopping ambitions, will expand later in 2021 beyond the initial group of creators.

Image Credits: YouTube

Fintech

Robinhood’s CEO Vlad Tenev testified before Congress this week over the GameStop frenzy. Tenev denied helping hedge funds and asked for the SEC to modify trading rules. AOC pointed out that Robinhood isn’t truly free, it’s just hiding the cost from retail investors by subsidizing free trades with payment for order flow. (A percentage of its revenue Tenev ridiculously claimed he couldn’t recall, saying only “it’s over 50%.”)

From the hearing, via CSPAN

Social

TikTok parent ByteDance is exploring a sale of its TikTok operations in India to Bangalore-headquartered Glance, a mobile content platform founded by InMobi founder Naveen Tewari. Glance operates a TikTok rival Roposo, which has seen massive growth since TikTok was banned in India over national security concerns. The two companies — ByteDance and Glance parent InMobi Pte — share an investor with SoftBank, which initiated the talks, per a Bloomberg report.

Instagram is fixing the iMessage bug. Some suspected the issue was related to Apple and Facebook’s ongoing public battles, but Instagram said the problem where Instagram links in iMessage wouldn’t show a preview was just a bug. The company noted a fix will arrive soon.

TikTok inks a multi-year deal with UFC which includes livestreams of pre- and post-fight content, and other behind-the-scenes footage. The content will stream on UFC TikTok accounts including @UFC, @UFCRussia, @UFCBrasil and @UFCEurope.

Douyin, the Chinese version of TikTok, now has 550 million users for its in-app Search feature alone. The app last reported in September it had 600 million daily users, indicating an even larger base of MAUs.

TikTok’s China twin Douyin has 550 million search users, takes on Baidu

Right-wing social network Parler announced it’s back online for existing users and will re-open to new users next week. The company also has a new interim CEO, Mark Meckler, who previously co-founded the Tea Party Patriots.

Parler crawls back online empty and with a Tea Party CEO

Triller is mired in controversy over its MAUs. A Billboard report says the company misrepresented the number of monthly active users it had — 25 million instead of the 50 million it claimed. Triller CEO Mike Lu had said the discrepancies didn’t matter because there’s “no legal definition” for an MAU. After the report came out, Lu denied the company was inflating its numbers. We happen to recall that Triller immediately threatened to sue over a report that it had inflated its downloads last year.

Photos

YouTube star David Dobrik’s photo-sharing app Dispo, backed by a $4 million seed, launched into private beta to a ton of buzz. The app quickly maxed out TestFlight’s 10,000-person limit, instead of being the low-key beta debut the team had expected. Dispo’s gimmick is that users have to wait 24 hours to see the photos they snap.

Messaging

 

Image Credits: WhatsApp

WhatsApp will roll out an in-app banner in an attempt to better explain its new privacy policy. When clicked, users will be directed toward policy information they can review at their leisure ahead of the May 15 deadline to accept the changes.

Streaming & Entertainment

Image Credits: App Annie

Clubhouse has topped 8 million global downloads, 2.6 million of which were in the U.S., according to a new report from App Annie. The report also highlighted the broader impact Clubhouse is having on social audio, as local audio apps are gaining new installs, too.

Report: Social audio app Clubhouse has topped 8 million global downloads

Global mobile users streamed 935 billion hours of video in 2020, up 40% YoY, says App Annie. The pandemic impacts were clear — users went from 146 billion hours in Q1 2019 to 240 billion in Q4 2020, a 65% rise in two years.

Cameo, the app that connects customers with celebs for paid personalized messages, is said to be raising $100 million, valuing its business at $1 billion, reports Bloomberg Quint. Not coincidentally, Facebook just began testing its Cameo clone, Super.

YouTube reveals its 2021 plans. In a blog post from Chief Product Officer Neal Mohan, YouTube gave a look at coming updates across its suite of apps:

  • YouTube to redesign its YouTube VR app homepage to improve navigation, accessibility and search functionality.
  • YouTube says it will expand its video chapters feature to add chapters automatically and update the watch experience to be more intuitive, including on the tablet.
  • YouTube TV, now with 3 million-plus users, will introduce a paid add-on that will support 4K streaming, DVR for off-line playback and unlimited simultaneous in-home streams.
  • YouTube Kids will add a feature that allows parents to specify the channels and videos their kids are allowed to watch.
  • YouTube will expand its Applause tipping feature to more creators in 2021.
  • YouTube Music will improve playlist creation and make those playlists more discoverable.
  • And as noted above, YouTube is testing an e-commerce feature that lets users check out on the app.
  • YouTube Shorts, an in-app TikTok rival of sorts, will come to the U.S. in March, following its tests in India.

YouTube to expand Shorts to the US, add 4K and offline DVR to YouTube TV, launch in-video shopping and more in 2021

Gaming

Microsoft xCloud, the game streaming service that lets users play Xbox games on Android tablets and phones, has begun testing a web version. In a review by The Verge, the experience is described as similar to the mobile version, with a simple launcher, recommendations, access to cloud games through Xbox Game Pass Ultimate and the ability to resume recently played games.

Apple demanded sensitive data from Valve to aid in its legal battle with Epic Games. The request included things like total yearly sales of apps and in-app products; annual ad revenues from Steam; annual revenues from Steam; annual earnings gross or net from Steam; and more. Apple also wanted the names of all Steam apps, price and IAP, and date range available. Valve, not surprisingly, did not agree to this. PCGamer has the full report.

Epic Games expands its legal fight with Apple to the EU. The Fortnite owner filed a formal antitrust complaint with the European Commission, alleging Apple’s anti-competitive restrictions that have “eliminated competition in app distribution and payments.” Epic Games is also fighting Apple in the U.S., U.K. and Australia.

Stadia layoffs shocked team. Google Stadia, the game streaming service available via Chromecast Ultra, the Chrome browser, ChromeOS tablets and the Stadia mobile app for Android, recently shut down its in-house game development studio, Stadia Games and Entertainment. A report from Kotaku this week indicates how much of a surprise this was to team, as just days before the mass layoffs, leadership was praising staff for their “great progress.”

Google shuts down its internal Stadia game studios

Health & Fitness

Apple tells developers that only apps submitted by recognized public health authorities will be able to publish “health pass” apps to the App Store. These apps are designed to show someone’s COVID-19 testing and vaccination status. Apple says it will accept apps from government, medical and other credentialed institutions, healthcare providers, laboratories and test kit manufacturers.

Apple promotes iOS health apps to Apple Card holders. In honor of American Heart Month, Apple emailed Apple Card users savings on iOS health apps including Strava, Ten Percent Happier, Sleep Cycle and Lifesum.

U.S. health & fitness apps saw over 405 million installs in 2020, up 22% year-over-year, reports Sensor Tower. The apps, which benefited from gym closures amid COVID, saw $838 million in consumer spend, up 42% YoY. The average age of users also continued climb, demonstrating better retention with older users.

Image Credits: Sensor Tower

A second report from the firm indicated U.S. pharmacy app installs were up 47% as the COVID-19 vaccine began to roll out.

Productivity

Microsoft launched a unified app for iPad that combines Word, PowerPoint, Excel and OneNote into one single app. The app is a free download with in-app subscriptions, starting at $6.99/month. A $69.99/year subscription is also available. Microsoft previously launched unified apps for the iPhone and Android.

Government & Policy

TikTok faces a new series of regulatory complaints in Europe, including unfair terms over its virtual currency, whose exchange rate can be modified by TikTok; unfair terms in relation to copyright, related to TikTok’s ability to redistribute users’ videos without paying them (e.g. for ads); child safety concerns over suggestive content and “hidden marketing” of its branded Hashtag Challenges; and other accusations of misleading data processing and privacy practices.

TikTok hit with consumer, child safety and privacy complaints in Europe

North Dakota’s Senate votes down the App Store bill that would have forced Apple to allow users to sideload apps on their mobile devices. The bill was funded by the advocacy group Coalition for App Fairness, which includes Epic Games, Spotify, Match Group, Tile and others with a beef against Apple over its commission structure. Similar bills are under consideration in Arizona and Georgia.

Adtech

The Post-IDFA Alliance, which consists of Liftoff, Fyber, Chartboost, InMobi, Vungle and Singular, launched a new “No IDFA? No Problem” resource that aims to help publishers and advertisers navigate the iOS 14 transition.

Security

File sharing app SHAREit, one of the world’s most popular apps, is found to have several security flaws, researchers reported. The vulnerabilities could be abused to leak sensitive user data and “execute arbitrary code” with app permissions.

Funding and M&A

✨ Robinhood rival Public.com raised $220 million just months after its $65 million Series C, as previously reported by TechCrunch. Prior investors returned, including Greycroft, Accel, Tiger Global, Inspired Capital, and others, valuing the business at $1.2 billion.

✨ Robinhood rival Webull raised $150 million in a new round that values the business at over $1 billion. The brokerage was founded by Alibaba alum Wang Anquan and, like Public.com, has benefitted from the exodus of disgruntled Robinhood users, who left over the GameStop debacle.

✨ Math learning app Photomath raised $23 million in Series B funding in a round led by Menlo Ventures. The app, now with 220 million downloads, lets you point your phone at a math problem and it explains the solution.

Math learning app Photomath raises $23 million as it reaches 220 million downloads

✨ Live video shopping startup Talkshoplive raised $3 million from Spero Ventures for its live video shopping platform that lets users watch its videos on the web and mobile web — or anywhere else they’re embedded.

✨ Event networking app Grip raised a $13 million Series A, despite the pandemic. The app pivoted last year to support virtual, hybrid and live events, instead of just in-person events.

✨ Mobile gaming startup Artie raised $10 million for its gaming platform that lets users play mobile games without installing an app, from the browser or anywhere links can be shared online. Investors included Zynga founder Mark Pincus, Kevin Durant and Rich Kleiman’s Thirty Five Ventures, Scooter Braun’s Raised In Space, Shutterstock founder Jon Oringer, Tyler and Cameron Winklevoss, Googler Manuel Bronstein and YouTube co-founder Chad Hurley.

✨ Low-code app development service OutSystems raised $150 million in a round led by Abdiel Capital and Tiger Global, valuing the business at $9.5 billion.

✨ Cross-border neobanking app Zolve raised $15 million in a seed round led by Accel and Lightspeed. The app was founded by the Raghunandan G, the founder of ride-hailing firm TaxiForSure, which exited to Ola. It’s aimed at people moving from India to the U.S. or vice versa.

Zolve raises $15 million for its cross-border neobank aimed at global citizens

✨ Dating app Jigsaw raised $3.7 million for its app that hides daters’ faces with puzzle pieces in an effort to push users to engage and get to know each other before the reveal. While “face reveals” are popular on social media, a dating app that does this lends itself to objectifying people by not showing the face, as users focus on the daters’ body instead.

Downloads

Outfit

Image Credits: Outfit

TechCrunch this week covered DIY home renovation startup Outfit, which leverages consumers’ mobile devices to help them with their home projects. After submitting information, including dimensions and photos, Outfit’s app offers the customer a step-by-step guide for completing the project, including documenting their space, getting items and tools delivered, a custom to-do list and receiving support while the project is underway.

Outfit wants to make DIY home improvements easier to tackle

Hush

Image Credits: Hush

Hush, a recently launched Safari ad blocker for Mac, iPhone and iPad, does more than just block ads. The app also works to block other invasive trackers and those annoying cookie warnings that now pop up everywhere due to GDPR laws. (it actually doesn’t consent or deny the “accept cookies?” requests — it just blocks the scripts and elements on the website. It doesn’t interact with the site or click any buttons.

Unlike some blockers, Hush doesn’t collect your data. It doesn’t log your browser habits or passwords or even collect crash reports. It’s also free, but you can sponsor the developer on GitHub.

Zillow’s update

The updated version of Zillow’s 3D Home app introduced new technology that combines into one interface 3D Home tours, listing photos and AI-generated floor plans. To create the floor plans and home tour, the app uses computer vision and machine learning on panoramic photos the agent or photographer captured using the app and a 360-degree camera. The app also leverages AI to predict things like room dimensions and square footage. Both the home tour and floor plan can then be automatically uploaded to the lists and added to a website, MLS or shared on email/social media.

Due to the pandemic, Zillow 3D Home tours published on for-sale listings increased 255% during 2020 as customers used it as a safer way to tour properties, the company also noted.

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Daily Crunch: Uber loses UK legal challenge

Published February 19, 2021

Uber loses a legal battle over driver classification, we survey mobility investors and new data suggests a COVID-19 vaccine should be easier to transport. This is your Daily Crunch for February 19, 2021.

The big story: Uber loses UK legal challenge

The United Kingdom’s Supreme Court has reaffirmed earlier rulings that the Uber drivers who brought the case — which dates back to 2016 — are workers, not independent contractors.

“Drivers are in a position of subordination and dependency in relation to Uber such that they have little or no ability to improve their economic position through professional or entrepreneurial skill,” the court said in a statement. “In practice the only way in which they can increase their earnings is by working longer hours while constantly meeting Uber’s measures of performance.”

Uber, while acknowledging the decision, emphasized that it applies to the specific group of drivers who brought the case, many of whom are no longer driving through the app.

Startups, funding and venture capital

Ex-General Catalyst and General Atlantic VC announces $68M debut fund — New York-based Avid Ventures is launching its $68 million debut venture capital fund.

With $20M A round, Promise brings financial flexibility to outdated government and utility payment systems — Promise integrates with official payment systems to offer more forgiving terms for fees and debts that people can’t handle all at once.

Acast acquires podcasting startup RadioPublic — RadioPublic spun out of public radio marketplace PRX in 2016.

Advice and analysis from Extra Crunch

Ten investors predict MaaS, on-demand delivery and EVs will dominate mobility’s post-pandemic future — The COVID-19 pandemic didn’t just upend the transportation industry, it laid bare its weaknesses and uncovered potential opportunities.

A fraction of Robinhood’s users are driving its runaway growth — A closer look at payment for order flow, a controversial practice in which Robinhood is paid by market makers for executing customer trades.

Three strategies for elevating brand authority in 2021 — Advice from Fractl marketing director Amanda Milligan.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

Pfizer-BioNTech’s COVID-19 vaccine just got a lot easier to transport and distribute — There’s new stability data collected by Pfizer and BioNTech, which has been submitted to the U.S. Food and Drug Administration.

Dizzying view of Perseverance mid-descent makes its ‘seven minutes of terror’ feel very real — NASA has just shared a hair-raising image of the rover as it dangled from its jetpack above the Martian landscape.

Will the Texas winter disaster deter further tech migration? — It’s too early to tell the exact toll the storm has taken in loss of life, property damage and economic activity.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

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