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The Exchange: Unicorn IPOs, tech earnings and my favorite VC round from the week

Published August 1, 2020

The TechCrunch Exchange newsletter just launched. Soon only a partial version will hit the site, so sign up to get the full download.

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter for your weekend enjoyment. It’s broadly based on the daily column that appears on Extra Crunch, but free. And it’s made just for you.

You can sign up for the newsletter here. With that out of the way, let’s talk money, upstart companies and the latest spicy IPO rumors.

Affirm dreams of an 11-figure SPAC

If you are tired of reading about special purpose acquisition companies, or SPACs, we hear you. We’re sick of them as well. But they keep cropping up, this time in the form of a possible IPO alternative for Affirm, a fintech unicorn that has raised more than $1 billion to provide consumers with point-of-sale installment loans. (Rates from 0% to 30%, terms of up to 36 months.)

Affirm is effectively a lending company that plugs into e-commerce firms. Researching this entry I had an idea in the back of my head that Affirm had a super-neat credit system to rate users. But reading through its own FAQ and what NerdWallet has to say on the company, its methods seem somewhat pedestrian.

Regardless, distribution is key for the company, and Affirm recently linked up with Shopify. That should provide it another dose of growth. The very sort of thing that IPO investors want. The WSJ reported that Affirm could go public this year, perhaps via a SPAC, at a valuation of $5 to $10 billion.

I did my best to map out what those valuations implied, generally finding that Affirm needs to have hella loan volume to make the sort of money that a $10 billion figure implies. Of course, I was trying to make numerical sense. The stock market in 2020 is a bit more relaxed than that.

All this SPAC talk is still mostly bullshit, mind. We are seeing public debuts this year. And every single one of them that has been of note has been a traditional IPO, at least as far as I can recall. The running history of direct listings and SPAC debuts that matter is pretty slim.

Of course, Coinbase and Asana and DoorDash and Airbnb, among others, are in need of liquidity and could yet pull the trigger on a more exotic debut. Hell, Qualtrics could do something wild in its impending IPO but we doubt it will.

Market Notes

The biggest market news this week had little to do with startups. Instead, it came from the anti-startups, namely the largest American tech companies, which smashed their earnings reports. Alphabet actually shrank year-over-year, but it still beat expectations. Facebook and Amazon and Apple were juggernauts in the quarter.

  • Given the positive notes we’ve heard from startups and startup investors about how Q2 sales performance was better than expected, and is in some cases besting plans set at the start of the year, the SuperMegaTech results are not a shock.
  • Many tech-powered companies of all maturities seem to be catching a boost.

The startups that aren’t are DOA. As Freestyle Capital’s Jenny Lefcourt told TechCrunch the other week, every investor wants into the next round of startups that have caught a COVID tailwind. And precisely zero investors want into the proximate funding event for startups that haven’t.

Moving along, don’t re-invest your retirement funds just yet, but bitcoin is back over $10,000 and is currently trading for $11,300 as I write to you. Given that the price of bitcoin is a workable barometer for consumer interest, trading volume and, perhaps, development work in the crypto space, the recent market movement is good news for crypto-fans.

Turning our heads to breaking news this Friday, news was brewing that the Trump administration was looking to force ByteDance, a Chine-based mega-startup, to sell the U.S. operations of TikTok, the super-popular social app. 

  • How? When? We don’t know, but the political and economic situation between the United States and China is getting worse, not better. How you feel about that will depend on your politics.

There were 25 equity-only rounds of $50 million or more in the last week, 22 if you strip out private equity-led rounds and post-IPO investments. That’s a little over $2.6 billion in late-stage capital collected by Crunchbase in a single week. No matter what you might hear from startups stuck on the wrong side of the COVID-19 divide, money is still flowing and quickly.

Stack Overflow’s $85 million round was the tenth largest deal of the week. Damn.

Other rounds you may have missed: $33 million for San Mateo-based Helix, Argo AI is now worth $7.5 billion after its most recent fundraising, $11 million for Brazil-focused wealth manager Magnetis, $16 million for construction-tech company Buildots and $20 million for Instrumental, my favorite round of the week,

Investment into AI-focused startups suffered in Q2, but descended from all-time highs so the numbers were still pretty ok.

On the VC topic, TechCrunch’s own Danny Crichton (he’s on the podcast with me every week) has updated the TechCrunch list with another 116 VCs that are willing to write first checks. The project has been oceans of work, so please do check it out if you have the time, or are looking to fundraise.

Various and Sundry

And, to wrap up, as always, here’s a collection of data, news and other miscellania that is worth your time from this super insane week:

Moving toward the close, Redpoint VP Jamin Ball is writing a series on cloud/SaaS that I’m reading here and there. Take a peek.

And, speaking of VCs out there doing my job, Floodgate partner Iris Choi (an Equity regular) does frequent live streams that she calls Market Musings that I try to snag when I can. It’s always interesting to hear how people with more money than I do think about the market as they are ever-so-slightly more invested in its outcomes. 

Excuse the pun, give yourself a hug for making it through the week, make sure to hit up the latest Equity episode and let’s all go for a run. — Alex

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Startups Weekly: Qualtrics IPO to be even more exciting this time around

Published August 1, 2020

Editor’s note: Get this free weekly recap of TechCrunch news that any startup can use by email every Saturday morning (7am PT). Subscribe here.

German software giant SAP bought experience management platform Qualtrics for $8 billion days before the unicorn’s IPO, back in November of 2018. But last weekend it decided to spin out the experience management provider to finally go public on its own. The analysts Ron Miller talked to speculated about strategic issues on the SAP side, and concluded this was more of an internal reset combined with the financial gain from a promising offering.

Qualtrics, meanwhile, already put the Utah startup scene on the map for people around the world. Having grown strongly post-acquisition, it is now set up to be the largest IPO in state history. Here’s Alex Wilhelm with more analysis in Extra Crunch:

According to metrics from the Bessemer Cloud Index, cloud companies with growth rates of 35.5% and gross margins of 71.3% are worth around 17.3x in enterprise value compared to their annualized revenue.

Given how close Qualtrics is to that averaged set of metrics (slightly slower growth, slightly better gross margins), the 17.3x number is probably not far from what the company can achieve when it does go public. Doing the sums, $800 million times 17.3 is $13.8 billion, far more than what SAP paid for Qualtrics. (For you wonks out there, it’s doubtful that Qualtrics has much debt, though it will have lots of cash post-IPO; expect the company’s enterprise value to be a little under its future market cap.)

So, the markets are valuing cloud companies so highly today that even after SAP had to pay a huge premium to buy Qualtrics ahead of its public offering, the company is still sharply more valuable today after just two years of growth.

Back to the era of nation-states

The tech industry is getting broken down and reformed by national governments in ways that many of its leaders do not seem to have planned for as part of scaling to the world, whether you consider TikTok’s ever-shrinking global footprint or leading tech CEOs getting called out by Congress. When you skim through the numerous headlines on these topics this week, you’ll see a very clear message in the subtext: Every startup has to think more carefully about its place in the world these days, as a matter of survival.

Big tech crushes Q2 earnings expectations

Lawmakers argue that big tech stands to benefit from the pandemic and must be regulated

Secret documents from US antitrust probe reveal big tech’s plot to control or crush the competition

Apple’s App Store commission structure called into question in antitrust hearing

Zuckerberg unconvincingly feigns ignorance of data-sucking VPN scandal

In antitrust hearing, Zuckerberg admits Facebook has copied its competition

Before buying Instagram, Zuckerberg warned employees of ‘battle’ to ‘dislodge’ competitor

Apple CEO Tim Cook questioned over App Store’s removal of rival screen time apps in antitrust hearing

Google’s Sundar Pichai grilled over ‘destroying anonymity on the internet’

Bezos ‘can’t guarantee’ no anti-competitive activity as Congress catches him flat-footed

Amazon’s hardware business doesn’t escape Congressional scrutiny

Time for TikTok:

India bans 47 apps cloning restricted Chinese services

After India and US, Japan looks to ban TikTok and other Chinese apps

Report: Microsoft in talks to buy TikTok’s US business from China’s ByteDance

The leading arguments for a Microsoft-TikTok tie-up 😉

And last but not least ominously, for large platforms…

Australia now has a template for forcing Facebook and Google to pay for news

The team at remote-first enterprise startup Seeq put together this montage of some of its remote offices.

Remote work still getting big investment

This loosely defined subsector of SaaS went from being a somewhat mainstream idea within the startup world last year to being fully mainstream with the wider world due to the pandemic this year. But publicly traded companies have been some of the biggest beneficiaries (see previous item), and the action around earlier-stage startups has been less clear. Lucas Matney and Alex caught up with six investors who have been focused on various parts of the space to get the latest for Extra Crunch. Here’s a pithy description of fundraising trends that companies are experiencing, from Elliott Robinson, a growth-stage investor at Bessemer:

How competitive are remote-work tooling venture rounds now?

Incredibly competitive. I think one dynamic I’ve seen play out is that the basket of remote-work companies that are really high-performing right now are setting lofty price expectations well ahead of the raise. Many of these companies didn’t plan on raising in Q2/Q3, but with COVID tailwinds, they are choosing to raise at some often sight-unseen-level valuation multiples.

Are prices out of control?

I think it depends on your definition of out of control. The reality is that many of these companies are raising money off cycle from their natural fundraising date for two reasons: One, they are seeing once in a lifetime digital transformation and adoption of remote-work tooling solutions. And, two, so many investors have raised sizable funds during the last nine months that they are leaning into investing in these companies — one of the few segments that will likely continue to see tailwinds as COVID cases continue to rise again in the U.S. Other traditional software value props may face significant headwinds in a uncertain COVID world. Thus, growth equity investors are paying high multiples to get a shot at the category-defining RW app companies.

Haptics in a pandemic-stricken world

Haptics are a great sort of gee-whiz technology, but the practical future of touch-based communication is all over the place — VR devices are suddenly more interesting, touchpads less so. Devon Powers and David Parisi are academics and authors who focus on the space, and they wrote a big guest post for TechCrunch this week that sketched out some of the ups and downs of the decades-old concept. Here’s a key excerpt:

Getting haptics right remains challenging despite more than 30 years’ worth of dedicated research in the field. There is no evidence that COVID is accelerating the development of projects already in the pipeline. The fantasy of virtual touch remains seductive, but striking the golden mean between fidelity, ergonomics and cost will continue to be a challenge that can only be met through a protracted process of marketplace trial-and-error. And while haptics retains immense potential, it isn’t a magic bullet for mending the psychological effects of physical distancing.

Curiously, one promising exception is in the replacement of touchscreens using a combination of hand-tracking and midair haptic holograms, which function as button replacements. This product from Bristol-based company Ultraleap uses an array of speakers to project tangible soundwaves into the air, which provide resistance when pressed on, effectively replicating the feeling of clicking a button.

Ultraleap recently announced that it would partner with the cinema advertising company CEN to equip lobby advertising displays found in movie theaters around the U.S. with touchless haptics aimed at allowing interaction with the screen without the risks of touching one. These displays, according to Ultraleap, “will limit the spread of germs and provide safe and natural interaction with content.”

A recent study carried out by the company found that more than 80% of respondents expressed concerns over touchscreen hygiene, prompting Ultraleap to speculate that we are reaching “the end of the [public] touchscreen era.” Rather than initiate a technological change, the pandemic has provided an opportunity to push ahead on the deployment of existing technology. Touchscreens are no longer sites of naturalistic, creative interaction, but are now spaces of contagion to be avoided. Ultraleap’s version of the future would have us touching air instead of contaminated glass.

Finding the best investors for you: The TC List and Europe surveys

Speaking of investors, TechCrunch has been busy with a few other projects to you find the right ones faster.

First, Danny Crichton has pushed a third update to The TechCrunch List, due to the ongoing flood of recommendations. In his words: “Now using more than 2,600 founder recommendations — more than double our original dataset — we have underscored a number of the existing investors on our list as well as added 116 new investors who have been endorsed by founders as investors willing to cut against the grain and write those critical first checks and lead venture rounds.”

Check it out and filter by location, category and stage to narrow down your pitch list. If you are a founder and haven’t submitted your recommendation yet, please fill out our very brief survey. If you have questions, we put together a Frequently Asked Questions page that describes the qualifications and logistics, some of the logic behind the List and how to get in touch with us.

Second, our editor-at-large Mike Butcher is embarking on a virtual investor survey of European countries, to help Extra Crunch provide a clearer view about what’s happening in the Continent’s startup hubs in the middle of the world going crazy:

TechCrunch is embarking on a major new project to survey the venture capital investors of Europe. Over the next few weeks, we will be “zeroing-in” on Europe’s major cities, from A-Z, Amsterdam to Zurich — and many points in-between. It’s part of a broader series of surveys we’re doing to help founders find the right investors. For example, here is the recent survey of London.

Our survey will capture how each European startup hub is faring, and what changes are being wrought amongst investors by the coronavirus pandemic. We’d like to know how your city’s startup scene is evolving, how the tech sector is being impacted by COVID-19 and, generally, how your thinking will evolve from here. Our survey will only be about investors, and only the contributions of VC investors will be included. The shortlist of questions will require only brief responses, but the more you want to add, the better.

The deadline for entries is the end of next week, August 7th and you can fill it out here.

He also wanted me to let you know that he’ll resume his in-person trips as soon as allowed. (I actually made that up, but he has said as much.)

Around TechCrunch

Submit your pitch deck to Disrupt 2020’s Pitch Deck Teardown

Announcing the Disrupt 2020 agenda

Talking virtual events and Disrupt with Hopin founder Johnny Boufarhat

The TechCrunch Exchange: What’s an IPO to a SPAC?— In case you haven’t checked out Alex’s new weekly email newsletter yet.

Across the week

TechCrunch

Connected audio was a bad choice

Stanford students are short-circuiting VC firms by investing in their peers

Bitcoin bulls are running, as prices spike above $11K

Recruiting for diversity in VC

Build products that improve the lives of inmates

Extra Crunch

Six things venture capitalists are looking for in your pitch

VCs and startups consider HaaS model for consumer devices

Teespring’s comeback story

Cannabis VC Karan Wadhera on why the industry, which took a hit last year, is now quietly blazing

Jesus, SaaS and digital tithing

#EquityPod

From Alex:

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.

We had the full team this week: Myself, Danny and Natasha on the mics, with Chris running skipper as always.

Sadly this week we had to kick off with a correction as I am 1) dumb, and, 2) see point one. But after we got past SPAC nuances (shout-out to David Ethridge), we had a full show of good stuff, including:

And that’s Equity for this week. We are back Monday morning early, so make sure you are keeping tabs on our socials. Hugs, talk soon!

Equity drops every Monday at 7:00 a.m. PT and Friday at 6:00 a.m. PT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

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Disrupt 2020 early-bird savings extended until next week

Published August 1, 2020

Even the hard-charging world of early-stage startups has its share of procrastinators, lollygaggers, slow-pokes, wafflers and last-minute decision makers. If that’s your demographic, today is your lucky day.

You now have an extra week (courtesy of Saint Expeditus, the patron saint of procrastinators), to score early-bird savings to Disrupt 2020, which takes place September 14-18. Buy your pass before the new and final deadline — August 7 at 11:59 p.m. (PT) — and save up to $300. Who says prayers (or secular entreaties) go unanswered?

Your pass opens the door to five days of Disrupt — the biggest, longest TechCrunch conference ever. Drawing thousands of attendees and hundreds of innovative early-stage startups from around the world, you won’t find a better time, place or opportunity to accelerate the speed of your business.

Here are four world-class reasons to attend Disrupt 2020.

World-class speakers. Hear and engage with leading voices in tech, business and investment across the Disrupt stages. Folks like Sequoia Capital’s Roelof Botha, Ureeka’s Melissa Bradley and Slack’s Tamar Yehoshua — to name just a few. Here’s what you can see onstage so far.

World-class startups. Explore hundreds of innovative startups exhibiting in Digital Startup Alley — including the TC Top Picks. This elite cadre made it through our stringent screening process to earn the coveted designation, and you’ll be hard-pressed to find a more varied and interesting set of startups.

World-class networking. CrunchMatch, our AI-powered networking platform, simplifies connecting with founders, potential customers, R&D teams, engineers or investors. Schedule 1:1 video meetings and hold recruitment or extended pitch sessions. CrunchMatch launches weeks before Disrupt to give you more time to scout, vet and schedule.

World-class pitching. Don’t miss Startup Battlefield, the always-epic pitch competition that’s launched more than 900 startups, including big-time names like TripIt, Mint, Dropbox and many others. This year’s crop of startups promises to throw down hard for bragging rights and the $100,000 cash prize.

Need another reason to go? Take a page out of SIMBA Chain founder Joel Neidig’s playbook:

Our primary goal was to make people aware of the SIMBA Chain platform capabilities. Attending Disrupt is great way to get your name out there and build your customer base.

It’s time for all you last-minute lollygaggers to get moving and take advantage of this second, final chance to save up to $300. Buy your pass before August 7 at 11:59 p.m. (PT).

Is your company interested in sponsoring or exhibiting at Disrupt 2020? Contact our sponsorship sales team by filling out this form.

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Even as cloud infrastructure growth slows, revenue rises over $30B for quarter

Published July 31, 2020

The cloud market is coming into its own during the pandemic as the novel coronavirus forced many companies to accelerate plans to move to the cloud, even while the market was beginning to mature on its own.

This week, the big three cloud infrastructure vendors — Amazon, Microsoft and Google — all reported their earnings, and while the numbers showed that growth was beginning to slow down, revenue continued to increase at an impressive rate, surpassing $30 billion for a quarter for the first time, according to Synergy Research Group numbers.

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Delightree raises $3M to help franchise business owners simplify their operations

Published July 31, 2020

Owning one brick-and-mortar business seems complicated enough. But running multiple locations? For many owners, that’s a constant juggling act of phone calls, check lists and driving back and forth from store to store. In the middle of a pandemic, it gets all the more complex.

Delightree, a company out of the previous Alchemist Accelerator class, has raised $3 million to build a tool hyper-focused on helping owners of franchise businesses (think hotels, gyms, restaurant chains, etc.) take their operations and workflows digital.

A big part of the idea with Delightree is to move much of what currently happens through pen-and-paper checklists over to smartphones, allowing franchise owners to know what’s going at their locations from afar. They digitize workflows like the daily store opening/closing procedures or maintenance routines, with employees checking boxes on their devices rather than a paper to-do list. If something gets missed along the way, Delightree can automatically ping the owner to let them know before it becomes an issue.

They’ll also help to automate and track things like onboarding new employees and staying prepared for inspections, while giving owners a centralized place to make team-wide announcements or contact employees.

Delightree evolved out of a previous company built by its co-founders, Madhulika Mukherjee and Tushar Mishra. They’d been working on Survaider, a tool that monitored customer feedback across social media, review sites, etc., and turned that feedback into actionable to-do lists.

“When we were piloting it, our customers started saying: ‘can we create our own tasks? Or can I tell something to my employees through this?’ ” Mishra told me. “It was just such an obvious problem, so we started building Delightree.”

Delightree co-founders Tushar Mishra and Madhulika Mukherjee

The team has also been working on a feature they call Delightcomply, which helps stores stay up to date on the latest CDC guidelines for businesses operating through the pandemic, and to automatically share compliance details with potential customers. A business could use Delightcomply to publicly outline the steps it’s taking to keep employees/customers safe, for example, with the listing automatically updated to show the status of each task.

Delightree is currently working directly with each new customer to help them through the initial setup — specifically, to help franchisees take the standard operating procedures they receive directly from the brand owners and turn them into Delightree workflows. They’re still working out their exact pricing model, but say that they charge on a per-location-per-month basis, with pricing varying depending on the size/complexity of the business. They’ve set up a waitlist for anyone interested.

This $3 million seed round was funded by Accel Partners, Emergent Ventures, Brainstorm Ventures, Axilor Ventures and Alchemist. As part of the deal, Emergent partner Anupam Rastogi has joined Delightree’s board of directors.

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Big tech goes to Congress remotely

Published July 31, 2020

This week, the CEOs of Facebook, Apple, Alphabet and Amazon were called before the House’s Antitrust Subcommittee to defend the vast empires they’ve built. Jeff Bezos, Tim Cook, Sundar Pichai and Mark Zuckerberg faced questions about how their business practices propelled them into the market-dominant giants they are today. They lead four of the top six most valuable public companies in existence and are widely regarded as reshaping the consumer world, both within the tech industry and beyond. Watch TechCrunch reporters Taylor Hatmaker, Devin Coldewey and Alex Wilhelm discuss what happened during the hearing and what this might mean for the future of big tech.

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Cisco acquires Modcam to make Meraki smart camera portfolio even smarter

Published July 31, 2020

As the Internet of Things proliferates, security cameras are getting smarter. Today, these devices have machine learning capability that helps the camera automatically identify what it’s looking at — for instance, an animal or a human intruder? Today, Cisco announced that it has acquired Swedish startup Modcam and is making it part of its Meraki smart camera portfolio with the goal of incorporating Modcam computer vision technology into its portfolio.

The companies did not reveal the purchase price, but Cisco tells us that the acquisition has closed.

In a blog post announcing the deal, Cisco Meraki’s Chris Stori says Modcam is going to up Meraki’s machine learning game, while giving it some key engineering talent, as well.

“In acquiring Modcam, Cisco is investing in a team of highly talented engineers who bring a wealth of expertise in machine learning, computer vision and cloud-managed cameras. Modcam has developed a solution that enables cameras to become even smarter,” he wrote.

What he means is that today, while Meraki has smart cameras that include motion detection and machine learning capabilities, this is limited to single camera operation. What Modcam brings is the added ability to gather information and apply machine learning across multiple cameras, greatly enhancing the camera’s capabilities.

“With Modcam’s technology, this micro-level information can be stitched together, enabling multiple cameras to provide a macro-level view of the real world,” Stori wrote. In practice, as an example, that could provide a more complete view of space availability for facilities management teams, an especially important scenario as businesses try to find safer ways to open during the pandemic. The other scenario Modcam was selling was giving a more complete picture of what was happening on the factory floor.

All of Modcams employees, which Cisco described only as “a small team,” have joined Cisco, and the Modcam technology will be folded into the Meraki product line, and will no longer be offered as a standalone product, a Cisco spokesperson told TechCrunch.

Modcam was founded in 2013 and has raised $7.6 million, according to Crunchbase data. Cisco acquired Meraki back in 2012 for $1.2 billion.

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What does accountability look like in 2020?

Published July 30, 2020
Rae Witte
Contributor

Rae Witte is a New York-based freelance journalist covering music, style, sneakers, art and dating, and how they intersect with tech. You can find her writing on i-D, The Wall Street Journal, Esquire and Forbes, among others.

“What happens after a company gets called out?” he asked over the phone. “Do you know what happens to the people in-house that come forward?”

I didn’t.

A Black male engineer at a fashion tech company who wished to remain anonymous was telling me how he’d been passed over for promotions white counterparts later received after they’d pursued risky and unsuccessful projects. At one point, he said management tasked him with doing recon on a superior who made disparaging comments about women because his subordinates were uncomfortable reporting it directly to HR.

When human resources eventually took up the matter, the engineer said his participation was used against him.

More recently, his company brought furloughed employees back and managers promoted a younger, white subordinate over him. When he asked about the move, his direct supervisor said he was too aggressive and needed to be more of a role model to be considered in the future.

In the absence of industry leadership, there’s no blueprint to remedy institutional problems like these. The lack of substantial progress toward true representation, diversity and inclusion across several industries illustrates what hasn’t worked.

Audrey Gelman, former CEO of women-focused co-working/community space The Wing, stepped down in June following a virtual employee walkout. Three months earlier, a New York Times exposé interviewed 26 former and current employees there who described systemic discrimination and mistreatment. At the time, about 40% of its executive staff consisted of women of color, the article reported.

Within days, Refinery29’s EIC Christene Barberich also resigned after allegations of racism, bullying and leadership abuses surfaced with hashtag #BlackatR29.

In December 2019, The Verge reported allegations of a toxic work environment at Away under CEO Steph Korey. After a series of updates and corrections in reporting, it seemed she would be stepping away from her role or accelerating an existing plan for a new CEO to take over. But the following month, she returned to the company as co-CEO, sharing the statement: “Frankly, we let some inaccurate reporting influence the timeline of a transition plan that we had.”

Last month, after Korey posted a series of Instagram stories that negatively characterized her media coverage, the company again announced she would step down.

Bon Appétit former editor-in-chief Adam Rapaport resigned his position the same month after news broke that the cooking brand didn’t prioritize representation in its content or hiring, failed to pay women of color equally and freelance writer Tammie Teclemariam shared a 2013 photo of Rappaport in brown face.

In a public apology, staffs of Bon Appétit and Epicurious acknowledged that they had “been complicit with a culture we don’t agree with and are committed to change.”

Removing one problematic employee doesn’t upend company culture or help someone who’s been denied an opportunity. But with so much at stake when it comes to employing Instagram-ready branding, the lane is wide open for companies to meet the moment when it comes to doing the right thing.

A 2017 report by the Ascend Foundation found few Asian, Black and Latinx people were represented in leadership pipelines, and at that point, the numbers were actually getting worse. Seemingly, in an effort for transparency and accountability to do better, 17 tech companies shared diversity statistics and their plans to improve with Business Insider in June 2020. The numbers were staggering, especially for an initiative supposedly prioritized industry-wide in 2014:

Underrepresented minorities like Black and Latinx people still only make up single-digit percentages of the workforce at many major tech companies. When you look at the leadership statistics, the numbers are even bleaker.

While tech’s shortcomings show up clearly in a longstanding lack of diversity, companies in other industries polished their brands sufficiently to skate by — until COVID-19 and the call for racial justice after George Floyd’s murder called for lasting change.

In June, Adidas employees protested outside the company’s U.S. headquarters in Portland, Oregon and shared stories about internal racism. Just a year ago, The New York Times interviewed current and former employees about “the company’s predominantly white leadership struggling with issues of race and discrimination.”

In 2000, an Adidas employee filed a federal discrimination suit alleging that his supervisor called him a “monkey” and described his output as “monkey work.” When spokesperson Kanye West said in 2018 that he believed slavery was a choice, CEO Kasper Rorsted discussed his positive financial impact on the brand and avoided commenting on West’s statement.

In response to the internal turmoil at Adidas, the brand originally pledged to invest $20 million into Black communities in the U.S. over the next four years, increasing it to $120 million and releasing an outline of what they plan to do internally, Footwear News reported.

On June 30, Karen Parkin stepped down from her role as Adidas’ global head of HR in mutual agreement with the brand. In an all-employee meeting in August 2019, she reportedly described concerns about racism as “noise” that only Americans deal with. She’d been with the brand for 23 years.

Routinely protecting employees perceived as racist, misogynistic or abusive is bad for business. According to a 2017 “tech leavers” study conducted by the Kapor Center, employee turnover and its associated costs set the tech industry back $16 billion.

POC experience-centered social and wellness club Ethel’s Club invested into its community’s well-being and has not only managed to stay open (virtually) through the COVID-19 pandemic, it has managed to grow. Meanwhile, The Wing lost 95% of its business.

So, what really happens after the companies are called out? Often, the bare minimum. While the perpetrators of the injustice may endure backlash, abusers in corporate structures are often shifted into other roles.

Tiffany Wines, a former social media and editorial staffer at media/entertainment company Complex, posted an open letter to Twitter on June 19 alleging that Black women at the outlet were mistreated, sharing a story in which she claimed to have ingested marijuana brownies left in an office that was billed as a drug-free environment. Wines said she blacked out and accused superiors of covering up the incident after she reported it.

Her decision to speak up prompted other former employees to share stories alleging misogyny, racism, sexual assault and protection of abusers. One anonymous editor said she was asked if she would be comfortable with a workplace that had a “locker room culture” during a 2010 interview. (She did not end up working there.)

Complex Media Group put out a statement four days later on its corporate Twitter account, which had approximately 100 followers — as opposed to its main account, which has 2.3 million followers.

“We believe Complex Networks is a great place to work, but it is by no means perfect,” read the statement. “It’s our passion for our brands, communities, colleagues, and the belief that a safe and inclusive workplace should be the expectation for everyone.” It went on to state that they’ve taken immediate action, but it’s unclear if anyone has been terminated. [Complex is co-owned by Verizon Media, TechCrunch’s parent company.]

Members of the fashion community have formed multiple groups to combat systemic racism, establish accountability and advance Black people in the industry.

Set to launch in July 2020, The Black In Fashion Council, founded by Teen Vogue editor-in-chief Lindsay Peoples Wagner and fashion publicist Sandrine Charles, works to advance Black individuals in fashion and beauty.

The Kelly Initiative is comprised of 250 Black fashion professionals hoping to blaze equitable inroads, and they’ve publicly addressed the Council of Fashion Designers of America in a letter accusing them of “exploitative cultures of prejudice, tokenism and employment discrimination to thrive.”

Co-founders of True To Size, Jazerai Allen-Lord and Mazin Melegy, an extension of the New York-based branding agency Crush & Lovely, started offering their Check The Fit solutions to the brands they were working with in 2019. The initiative is an audit process created to align in-house teams and ensure sufficient representation is in place for brands’ storytelling.

Check The Fit determines who the consumer is, what the internal team’s history is with that demographic and the message they’re trying to communicate to them, and how the team engage’s with that subject matter in everyday life and in the office. Melegy says, “that look inward is a step that is overlooked almost everywhere.”

“At most companies, we’ve seen a lack of coherence within the organization, because each department’s director is approaching the problem from a siloed perspective. We were able to bring 15 leaders across departments together, distill through a list of concerns, find points of leverage and agree on a common goal. It was noted that it was the first time they were able to feel unified in their mission and felt prepared to move forward,” Lord says of their work with Reebok last year.

Brooklyn-based retailer Aurora James established the 15 Percent Pledge campaign, which urges retailers to have merchandise that reflects today’s demographics: 15% of the population should represent 15% of the shelves.

During the melee that transpired largely on Twitter and Instagram only to attempt to be reconciled in boardrooms, one Condé Nast employee and ally has been suspended. On June 12, Bon Appétit video editor Matt Hunziker tweeted, “Why would we hire someone who’s not racist when we could simply [checks industry handbook] uhh hire a racist and provide them with anti-racism training…” As his colleagues shared an outpouring of support online, a Condé Nast representative said in a statement, “There have been many concerns raised about Matt that the company is obligated to investigate and he has been suspended until we reach a resolution.”

Simply reading through accusers’ first-person accounts, it often seems like these stories end up on public forums because little to nothing is done in favor of the people who step forward. The protection has consistently been of the company.

The Black engineer I spoke to escalated his concerns to his company’s CEO and said the executive was unaware of the allegations and seemed deeply concerned.

Seeing someone who seemed genuinely invested in doing the right thing “obviously, means a lot,” he said.

“But at the same time, I’m still really concerned knowing the broader environment of the company, and it’s never just one person.”

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Atlassian acquires asset management company Mindville

Published July 30, 2020

Atlassian today announced that it has acquired Mindville, a Jira-centric enterprise asset management firm based in Sweden. Mindville’s more than 1,700 customers include the likes of NASA, Spotify and Samsung.

Image Credits: Atlassian

With this acquisition, Atlassian is getting into a new market, too, by adding asset management tools to its lineup of services. The company’s flagship product is Mindville Insights, which helps IT, HR, sales, legal and facilities to track assets across a company. It’s completely agnostic as to which assets you are tracking, though, given Atlassian’s user base, most companies will likely use it to track IT assets like servers and laptops. But in addition to physical assets, you also can use the service to automatically import cloud-based servers from AWS, Azure and GCP, for example, and the team has built connectors to services like Service Now and Snow Software, too.

Image Credits: Mindville

“Mindville Insight provides enterprises with full visibility into their assets and services, critical to delivering great customer and employee service experiences. These capabilities are a cornerstone of IT Service Management (ITSM), a market where Atlassian continues to see strong momentum and growth,” Atlassian’s head of tech teams Noah Wasmer writes in today’s announcement.

Co-founded by Tommy Nordahl and Mathias Edblom, Mindville never raised any institutional funding, according to Crunchbase. The two companies also didn’t disclose the acquisition price.

Like some of Atlassian’s other recent acquisitions, including Code Barrel, the company was already an Atlassian partner and successfully selling its service in the Atlassian Marketplace.

“This acquisition builds on Atlassian’s investment in [IT Service Management], including recent acquisitions like Opsgenie for incident management, Automation for Jira for code-free automation, and Halp for conversational ticketing,” Atlassian’s Wasmer writes.

The Mindville team says it will continue to support existing customers and that Atlassian will continue to build on Insight’s tools while it works to integrate them with Jira Service Desk. That integration, Atlassian argues, will give its users more visibility into their assets and allow them to deliver better customer and employee service experiences.

Image Credits: Mindville

“We’ve watched the Insight product line be used heavily in many industries and for various disciplines, including some we never expected! One of the most popular areas is IT Service Management where Insight plays an important role connecting all relevant asset data to incidents, changes, problems, and requests,” write Mindville’s founders in today’s announcement. “Combining our solutions with the products from Atlassian enables tighter integration for more sophisticated service management, empowered by the underlying asset data.”

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