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Daily Crunch: Verizon sells HuffPost to BuzzFeed

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HuffPost has a new owner, Facebook says its misinformation-fighting AI is getting smarter and Affirm files to go public. This is your Daily Crunch for November 19, 2020.

The big story: Verizon sells HuffPost to BuzzFeed

TechCrunch’s parent company Verizon Media has sold HuffPost. This is part of a larger deal that also includes an investment in BuzzFeed, a content syndication agreement, potential advertising collaboration and more.

BuzzFeed co-founder and CEO Jonah Peretti was actually one of The Huffington Post founders back in 2005. And it’s been nearly a decade since what was then AOL acquired HuffPost for $315 million.

“I have vivid memories of growing HuffPost into a major news outlet in its early years, but BuzzFeed is making this acquisition because we believe in the future of HuffPost and the potential it has to continue to define the media landscape for years to come,” Peretti said in a statement.

The tech giants

Facebook details AI advances in catching misinformation and hate speech — Facebook’s battle against misinformation will never be over at this rate, but that doesn’t mean the company has given up.

Instagram revamps its mobile messaging app Threads — The redesigned version of the Threads app includes updated navigation and a Status tab, as well as support for posting photos and videos to your Instagram Story.

Google plans to test end-to-end encryption in Android messages — Google says it will start with one-on-one conversations, leaving open the possibility of end-to-end encrypted group chats.

Startups, funding and venture capital

SellerX raises $118M to buy up and grow Amazon marketplace businesses — Somehow, this is a $118 million seed round.

Lime plans for ‘modes’ beyond bikes and scooters in 2021 — Lime CEO Wayne Ting hinted that a “third mode” is in the works for the first quarter of next year.

Near acquires Teemo to expand its data business into Europe — Teemo’s founder and CEO Benoit Grouchko will become Near’s chief privacy officer.

Advice and analysis from Extra Crunch

Inside Affirm’s IPO filing: A look at its economics, profits and revenue concentration — Is Affirm another pandemic-fueled company going public on the back of a COVID-19 bump, or are its business prospects more durable?

Is the internet advertising economy about to implode? — An interview with Tim Hwang on his new book, “Subprime Attention Crisis.”

Is a new game and $100M investment enough for South Korea’s PUBG to return to India? — South Korea-based PUBG Corporation announced last week that it plans to return to India, its largest market by users.

(Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

Tech in the Biden era — President-elect Joe Biden may have spent eight years in an administration that doted on the tech industry, but that long honeymoon (punctuated by four years of Trump) looks to be over.

‘Wonder Woman 1984’ is coming to HBO Max (and some US theaters) on Dec. 25 — The film will debut in theaters internationally on December 16, then launch in U.S. theaters and on HBO Max on December 25.

Fintech unicorn Affirm has a lot of eggs in one basket — The new episode of Equity includes additional thoughts on Affirm’s finances.

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.

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

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While mainland America struggles with covid apps, tiny Guam has made them work

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As covid-19 cases spiral out of control in the US, states are scrambling to fight the virus with an increasingly stretched arsenal. Many of them have the same weapons at their disposal: restrictions on public gatherings and enforcement of mask wearing, plus testing, tracing, and exposure notifications.

But while many states struggle to get their systems to work together, Guam—a tiny US territory closer to the Korean Peninsula than the North American mainland—may offer clues on how to rally communities around at least one part of the puzzle: smartphone contact tracing.

With no budget, and relying almost entirely on a grassroots volunteer effort, Guam has gotten 29% of the island’s adult residents to download its exposure notification app, a rate of adoption that outstrips states with far more resources. 

A collaborative effort 

Guam diagnosed its first covid cases in March, but a few weeks later, it gained international attention—and a much bigger case load—when a covid-stricken US Navy ship was ordered to dock at the Naval base on the island. Sailors who tested negative were quarantined in local hotels and forbidden from interacting with civilians.

Having so many positive cases on the island drove home how vulnerable the island really was—but it also created a lot of new volunteers looking for ways to help out. 

Around the same time, Vince Munoz, a developer at the Guam-based software company NextGenSys, got a call. The island was being offered a partnership with the PathCheck Foundation, a nonprofit that was building government contact tracing apps. Munoz immediately saw an opportunity to help his community fight this new threat.

“It is something you do to help other people,” Munoz says. “It empowers you to help reduce the spread of the virus.” 

Digital contact tracing is a potentially low-touch way for health departments to reduce the spread of covid-19 by using smartphones to track who’s been exposed. And even if exposure notifications aren’t the panacea many technologists hoped for, new research suggests that breaking even a few links in the chain of transmission can save lives. 

So Munoz’s team of volunteers connected with PathCheck—which was founded at MIT—and they started building an app called Covid Alert. Like the majority of America’s exposure notification apps, it uses a system built by Google and Apple and uses Bluetooth signals to alert people that they’ve crossed paths with someone who later tests positive. From there, they are urged to contact the island’s local health authorities and take appropriate action. Everything is done anonymously to protect privacy. 

After several months of testing and tweaking, the app was ready. But it was still missing an important piece: users. After all, any contact tracing app needs as many downloads as possible to make a difference. Munoz knew just the people to build buzz: the Guam Visitors Bureau. Tourism is massively important to the island, which gets more than 1.5 million visitors each year—almost 10 times the local population. In pre-pandemic times, the bureau helped tourists plan trips to Guam’s “star-sand beaches.” Staff jumped at the chance to help.

With assistance from Thane Hancock, a CDC epidemiologist based on the island, and Janela Carrera, public information officer for the Guam Department of Public Health and Social Services, the team started building a marketing campaign.

“Because we didn’t have any funding, we decided to do a grassroots campaign,” says Monica Guzman, CEO of Guam-based marketing company Galaide Group, who works with the bureau. Guam is a very small community. We’re all either related or neighbors or friends.”

While PathCheck and Munoz’s development team worked on building the app, the Visitors Bureau began reaching out to community groups and nonprofits to build awareness. It hosted Zoom calls with organizations, schools, and cultural groups across the island with the message that the app could help suppress the virus, if enough people were willing to “be a covid warrior.”

“The schools, the government agencies, the media, they all jumped on board,” Carrera says.

Together, these efforts are part of what ethics researchers at the Swiss Federal Institute of Technology recently called the “piecemeal creation of public trust.” To get people to use a novel technology like exposure notification, you have to reach people where they live and get buy-in from community leaders. 

It takes a village (on WhatsApp)

Once the app was ready to launch in September, it was time to get the word out. 

The day before the official launch, Visitors Bureau marketing manager Russell Ocampo sent a message about the app to Guam’s notoriously large and unruly WhatsApp groups. That message ricocheted around the island, resulting in almost 3,000 downloads immediately. “I received it back like 10 times from other people,” he says. 

A further 6,000 people signed up the next day during a press conference, including the governor, who downloaded it while live on the air. 

The effort received a show of support that many US states and territories could only dream of. All three major telecom companies on the island sent free texts encouraging people to download the app. A local TV station, meanwhile, ran a two-hour “download-a-thon,” to try driving uptake. The show featured performances by local musicians, interspersed with information about the app, including debunking myths about privacy and other ongoing concerns. Viewers were offered the chance to win $10,000 in prize money, much of it donated personally by Guam Visitors Bureau members and others who worked on the app, if they could prove they downloaded the app during the program. 

The Guam Visitors Bureau has offered other cash prizes for government agencies whose employees rack up the most downloads. And small businesses, eager to get the economy back on its feet, have offered give-aways to customers — one shopping center is offering a box of chocolates to visitors who download the app.

Challenges

But, crucially, has the app worked? Despite a successful launch, Guam’s covid-19 response has faced major challenges overall. Many people, especially those from minority ethnic groups who came to Guam from other Pacific islands, live in multi-generational, overcrowded housing, often with limited access to healthcare and even basic hygiene tools like municipal sewage. The health department recently launched door-to-door testing in these neighborhoods, and found positivity rates as high as 29%.

At the beginning of April, the governor’s office projected that the virus could kill 3,000 people—almost 2% of the island’s population—over the next five months. That dire prediction has yet to come true. As of Monday, Nov. 30, 112 people have reportedly died of covid on the island. Overall, the territory’s trajectory has been typical of America itself: Cases remained low through most of the summer, before ticking steadily up through the fall and spiking in early November. 

While a large proportion of residents have downloaded the app, one major challenge has been getting people to upload positive test results. This is in part because people are often in shock when they first receive the news about their diagnosis, according to Janela Carrera, the health department officer.

Contact tracers call everyone who tests positive, and part of their script involves recommending that people upload their positive result: That’s how the app knows to send (anonymous) exposure notifications to people who’ve been near each other. But that first call can feel extremely stressful, and it’s not a great time to suggest they try out a new app or go through the process of entering a special numerical code that kicks off the chain of notifications. 

“Especially if they’re symptomatic, they may feel like, ‘oh my gosh, I may not make it through this,’ or ‘I might be infecting others in my home.’ So [contact tracers] follow up with them a few days later, once they’ve had a chance to recuperate, and offer the code then,” Carrera says.

Clearly, though, some people are uploading the codes. “I’ve had co-workers tell me, ‘Janela, oh my God, I got a notification!’” Carrera says. Ocampo himself received one in October, and quarantined for 14 days. 

This is boosted by the fact that when public health workers do their door-to-door testing, they offer information about how to download the app. At the same time, other strategies, often shared through multilingual PSAs on local radio, may be more effective for people in these communities, who often don’t use smartphones for anything more than texting, according to Munoz.

Guam faces one other challenge that’s very common worldwide. It’s difficult to know exactly what effect the app is having, says Sam Zimmermann, CTO of PathCheck Foundation.

Zimmermann says: “Because Guam cares a lot about privacy and making sure their systems are safe, their app doesn’t have any kind of analytics or logging,” like whether users actually learn how the app works after downloading it or whether they pay attention if they receive an exposure notification. 

Still, while the team launched the app hoping to achieve a 60% download rate based on an early mathematical model, there’s now evidence that even a much smaller portion of the population using it may have a positive impact.

Munoz, for one, hopes the app will help take pressure off health officials doing labor-intensive outreach like door-to-door testing.

“Manual contact tracers have a very difficult job. They can’t keep up with everyone who tests positive,” Munoz says. “Any little percentage helps.”

This story is part of the Pandemic Technology Project, supported by the Rockefeller Foundation.

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With an eye for what’s next, longtime operator and VC Josh Elman gets pulled into Apple

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Josh Elman is moving over to Apple, he announced on Twitter today, saying he will be focused on the company’s App Store and helping “customers discover the best apps for them.”

Asked for more details about his new role, Elman referred us to Apple, which confirmed his employment but declined to offer more, including about his new title. (This is typical operating procedure for the tech giant.)

Certainly, Elman has plenty of experience with fast-growing technologies and popular apps in particular.  One of his first jobs out of Stanford was with RealNetworks, a bubble-era internet streaming company that went public in 1997, three years after it was founded. (It remains publicly traded, though its market cap is just $60 million these days.)

After RealNetworks, it was on to LinkedIn, which Elman joined in 2004 as a senior product manager when the company was just two years old.  From there, Elman worked in product management at the custom apparel and accessories company Zazzle, then at Facebook, then Twitter.

Perhaps unsurprisingly, the venture firm Greylock brought Elman into the fold in 2011 as a principal, and by 2013, he was a general partner, investing in social networking deals throughout like Musical.ly (Bytedance acquired the company and turned it into TikTok); Nextdoor (which is reportedly eyeing ways to go public); Houseparty (acquired last year by Epic Games, which is now suing Apple); and Discord (which is sewing up a private funding deal at a valuation of roughly $7 billion).

Somewhat unexpectedly, in 2018, Elman left his full-time role with Greylock to join a company notably not in the firm’s portfolio, the stock-trading platform Robinhood. As interesting, though he took on the role of VP of product at the popular and fast-growing startup, he didn’t cut ties with Greylock entirely, taking on the title of venture partner and remaining on as a board member to his companies.

Asked about the move, Elman told TC at the time that he had “started talking with a few of my partners about how I want to spend the next decade of my professional life. What gets me the most energized is when I can dig in on product with a hyper-growth company.”

Ultimately, the role didn’t last long, with Elman leaving last November after less than two years on the job. Now Elman — who said he’s stepping away from some of his Greylock-related board seats —  has a new chance to do what he loves most that from one of the most powerful perches in the world, the App Store.

“I’m really excited to get to build ways to help over a billion customers and millions of developers connect,” he tweeted earlier. He added in the same thread: “I recently found my college resume. My career objective was ‘To create great technology that changes people’s lives’. Still at it :)”

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Vista acquires Gainsight for $1.1B, adding to its growing enterprise arsenal

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Vista Equity Partners hasn’t been shy about scooping up enterprise companies over the years, and today it added to a growing portfolio with its purchase of Gainsight. The company’s software helps clients with customer success, meaning it helps create a positive customer experience when they interact with your brand, making them more likely to come back and recommend you to others. Sources pegged the price tag at $1.1 billion.

As you might expect, both parties are putting a happy face on the deal, talking about how they can work together to grow Gainsight further. Certainly, other companies like Ping Identity seem to have benefited from joining forces with Vista. Being part of a well-capitalized firm allowed them to make some strategic investments along the way to eventually going public last year.

Gainsight and Vista are certainly hoping for a similar outcome in this case. Monti Saroya, co-head of the Vista Flagship Fund and senior managing director at the firm, sees a company with a lot of potential that could expand and grow with help from Vista’s consulting arm, which helps portfolio companies with different aspects of their business like sales, marketing and operations.

“We are excited to partner with the Gainsight team in its next phase of growth, helping the company to expand the category it has created and deliver even more solutions that drive retention and growth to businesses across the globe,” Saroya said in a statement.

Gainsight CEO Nick Mehta likes the idea of being part of Vista’s portfolio of enterprise companies, many of whom are using his company’s products.

“We’ve known Vista for years, since 24 of their portfolio companies use Gainsight. We’ve seen Gainsight clients like JAMF and Ping Identity partner with Vista and then go public. We believe we are just getting started with customer success, so we wanted the right partner for the long term and we’re excited to work with Vista on the next phase of our journey,” Mehta told TechCrunch.

Brent Leary, principle analyst at CRM Essentials, who covers the sales and marketing space, says that it appears that Vista is piecing together a sales and marketing platform that it could flip or go public in a few years.

“It’s not only the power that’s in the platform, it’s also the money. And Vista seems to be piecing together an engagement platform based on the acquisitions of Gainsight, Pipedrive and even last year’s Acquia purchase. Vista isn’t afraid to spend big money, if they can make even bigger money in a couple years if they can make these pieces fit together,” Leary told TechCrunch.

While Gainsight exits as a unicorn, the deal might not have been the outcome it was looking for. The company raised more than $187 million, according to PitchBook data, though its fundraising had slowed in recent years. Gainsight raised $50 million in April of 2017 at a post-money valuation of $515 million, again per PitchBook. In July of 2018 it added $25 million to its coffers, and the final entry was a small debt investment raised in 2019.

It could be that the startup saw its growth slow down, leaving it somewhere between ready for new venture investment and profitability. That’s a gap that PE shops like Vista look for, write a check, shake up a company and hopefully exit at an elevated price.

Gainsight hired a new chief revenue officer last month, notably. Per Forbes, the company was on track to reach “about” $100 million ARR by the end of 2020, giving it a revenue multiple of around 11x in the deal. That’s under current market norms, which could imply that Gainsight had either lower gross margins than comparable companies, or as previously noted, that its growth had slowed.

A $1.1 billion exit is never something to bemoan — and every startup wants to become a unicorn — but Gainsight and Mehta are well known, and we were hoping for the details only an S-1 could deliver. Perhaps one day with Vista’s help that could happen.

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