<span>Monthly Archives</span><h1>January 2020</h1>
    Tech News

    Facebook hits 2.5B users in Q4 but shares sink from slow profits

    January 29, 2020

    Facebook beat Wall Street estimates in Q4 but slowing profit growth beat up the share price. Facebook reached 2.5 billion monthly users, up 2%, from 2.45 billion in Q3 2019 when it grew 1.65%, and it now has 1.66 billion daily active users, up 2.4% from 1.62 billion last quarter when it grew 2%. Facebook brought in $21.08 billion in revenue, up 25% year-over-year, with $2.56 in earnings per share.

    But net income was just $7.3 billion, up only 7% year-over-year compared to 61% growth over 2018. Meanwhile, operating margins fell from 45% over 2018 to 34% for 2019. Expenses grew to $12.2 billion for Q4 2019, up a whopping 34% from Q4 2018. For the year, Facebook’s $46 billion in expenses are up 51% vs 2018. One big source of those expenses? Headcount grew 26% year-over-year to 44,942, and Facebook now has over 1000 engineers working on privacy.

    While Facebook’s user base keeps growing rather steadily, it’s having trouble squeezing more and more cash out of them with as much efficiency.

    Facebook’s Q4 2019 earnings beat expectations compared to Zack’s consensus estimates of $20.87 billion in revenue and $2.51 earnings per share. Facebook shares fell over 7% in after-hours trading following the earnings announcement after closing up 2.5% at a peak $223.23 today. Still, Facebook remains near its previous share price high before this month.

    Facebook CEO Mark Zuckerberg had previously warned that addressing hate speech, election interference, and other content moderation and safety issues would be costly. Still, expenses grew and profits shrunk faster than Wall Street seems to have expected. Facebook will have to hope its promise of using scalable AI to handle more of these jobs comes to fruition soon.

    But some might see today as the proper reckoning for Facebook — penance for years of neglecting safety in favor of growth. Facebook’s CFO David Wehner confirms it has also just agreed to pay $550 million in a settlement over its violation of the Illinois Biometric Information Privacy Act. The class action suit stems from Facebook collecting users’ facial recognition data to power its Tag Suggestions feature that recommends friends tag you in photos in which you appear. The record-breaking settlement still falls far short of the $35 billion in potential penalties Facebook could have received.

    Facebook’s executives are apparently bullish on its value despite the share price being at a peak, as today Facebook announced plans to grow its share-repurchase program by $10 billion, adding to its previous authorization of buying back up to $24 billion worth.

    Facebook managed to add 1 million daily users in the U.S. & Canada region where it earns the most money after returning to growth there last quarter following a year of slow or no growth. Facebook’s stickiness, or daily to monthly active user ratio remained at 66% amidst competition from apps like TikTok and a resurgent Snapchat.

    Masking The Shift To Instagram

    Facebook notes that there are now 2.26 billion users that open either Facebook, Messenger, Instagram, or WhatsApp each day, up from 2.2 billion last quarter. The family of apps sees 2.89 billion total monthly users, up 9% year-over-year.

    Facebook released a new stat with this earnings report: Family Average Revenue Per Person. That’s essentially the company’s total revenue divided by total users on Facebook, Messenger, Instagram, and WhatsApp. Clearly, the company is trying to use Instagram’s growing ad revenue to make the rest of the company look stronger. This might help mask changes in the Facebook app’s own revenue as teens look to more youthful content feeds. Wehner confirmed the company will cease sharing Facebook-only stats in favor of Family Of Apps stats in late 2020.

    Sadly Facebook’s isn’t calling this metric FARPP

    Earnings Call Highlights

    Zuckerberg stressed Facebook’s need to stay focused on addressing social issues and consequences of the company’s growth during the earnings call. He said Facebook will continue to make its apps more private and secure.

    As for product updates, Zuckerberg seized on opportunities in commerce. Facebook is building out WhatsApp Pay, and he says “I expect this to start rolling out in a number of countries and for us to make a lot of progress here in the next six months.” 140 million small businesses now use its tools. People bought almost $5 million in content on the Oculus Store on Christmas Day, which Zuckerberg called a milestone. He says Facebook’s Spark AR platform is most used of its kind by developers, with hundreds of millions of people experiencing face filters built with it.

    Regarding plans to integrate the family’s chat interfaces, Zuckerberg says Messenger, Instagram, and WhatsApp will retain their brands. He also noted they’re already quite integrated on the backend…which could be an attempt to persuade regulators it might be difficult to break up the company.

    For guidance, Wehner said “we expect our year-over-year total reported revenue growth rate in Q1 to decelerate by low-to-mid single digit percentage points as compared to our Q4 growth rate. “Factors driving this deceleration include the maturity of our business, as well as the increasing impact from global privacy regulation and other ad targeting related headwinds.”

    Wehner says to expect that the worst of these privacy headwinds are still to come due to regulatory initiatives like GDPR and CCPA, mobile operating systems and browser providers like Apple and Google limiting access to ad targeting singals, and Facebook’s own product changes like the new way to disconnect off-Facebook data from your acccount.

    On Facebook’s perception issues, Zuckerberg said “We’re also focused on communicating more clearly what we stand for. One critique of our approach for much of the last decade was that, because we wanted to be liked, we didn’t always communicate our views as clearly because we were worried about offending people. So this led to some positive but shallow sentiments towards us and towards the company. And my goal for this next decade isn’t to be liked, but to be understood, because in order to be trusted, people need to know what you stand for.”

    Building Despite Scrutiny

    The business aside, Facebook had another tough quarter under the scrutiny of journalists and regulators. Democratic presidential candidates have railed against Zuckerberg’s decision to continuing allowing misinformation in political ads. The company dropped out of the top 10 places to work, and pledged $130 million to fund an Oversight Board for its content policies.

    The CEO was grilled on Capitol Hill about Facebook’s cryptocurrency Libra that seems stuck in its tracks as major partners like Visa and Stripe dropped out. Facebook took heat for how its treats content moderators and how it tried to cut off competitors from its developer platform. The FTC continued its anti-trust investigation and weighed an injunction that would halt Facebook intermingling its messaging app infrastructure.

    But those headwinds didn’t stop Facebook’s march forward. Its four main apps took the top four spots amongst the most downloaded apps of the 2010s. It moved deeper into hardware sales with its new Portal TV attachable camera. It acquired gaming companies like Playgiga and the studio behind VR hit Beat Saber, while signing exclusive game streaming deals with influencers like Disguised Toast. It launched Facebook News, Facebook Pay, its dating feature in the US, and it tested a meme-making app called Whale.

    Facebook’s share price remains near an all-time high despite today’s tumble. While the world may be increasingly uncomfortable with Facebook’s access to private data, there’s no debate about how incredibly valuable that data is.

    Source: Tech Crunch Mobiles | Facebook hits 2.5B users in Q4 but shares sink from slow profits

    Startups

    UCSD hospital gets a drone delivery program powered by Matternet and UPS

    January 29, 2020

    Drone delivery may not make a lot of sense for food or parcel delivery yet, but for hospitals it could be a lifesaver. A new test program is being inaugurated at UC San Diego’s Jacobs Medical Center, where Matternet drones operated by UPS will fly blood samples and other items to and from other nearby facilities.

    The new program will be the third under Matternet’s belt; an earlier partnership with UPS has made some 1,900 flights at WakeMed hospital in North Carolina, and flights with SwissPost in Zurich resume this month after crashes put them on ice over the summer.

    UPS partners with drone startup Matternet for medical sample deliveries

    Biological samples and other items that need to be moved quickly generally travel by courier service, which is of course fine sometimes, but not during rush hour. No one wants to have a second spinal tap because the first one got stuck in traffic.

    The flights these drones will be undertaking will be autonomous, but with remote monitoring and line of sight from Jacobs to the Moores Cancer Center and Center for Advanced Laboratory Medicine, both of which are less than a mile away.

    It’s a big month for Matternet, which in addition to these two concurrent flight test programs recently pulled in a strategic round from the healthcare-focused McKesson Ventures.


    Source: Tech Crunch Startups | UCSD hospital gets a drone delivery program powered by Matternet and UPS

    Startups

    Verkada raises $80M at $1.6B to be every building’s security OS

    January 29, 2020

    Fifty iPads were stolen from Verkada co-founder Hans Robertson’s old company. Only when they checked the security system did they realize the video cameras hadn’t been working for months. He was pissed. “The market lagged behind the progress seen in the consumer space, where someone could buy high-end cameras with cloud-based software to protect their home,” Verkada’s CEO and co-founder Filip Kaliszan tells me of his own attempt to buy enterprise-grade security hardware.

    Usually, startups ascend on the backs of fresh technologies and developer platforms. But Kaliszan and Robertson realized that commercial security was so backward that just implementing the established principles of machine vision and the cloud could create a huge company. The plan was to keep data secure yet accessible and train its cameras to take clearer photos when AI detects suspicious situations instead of just grainy video.

    At first, few could see the vision through the slow upgrade cycles and basement security rooms common with most potential clients. “The seed and the A were extremely difficult rounds to raise compared to the later rounds because people didn’t believe we could execute what were are proposing,” Kaliszan glumly recalls.

    But today Verkada receives a huge vote of confidence. It just raised an $80 million Series C at a stunning $1.6 billion post-money valuation thanks to lead investor Felicis Ventures writing Verkada its biggest check to date. The cash brings Verkada to $139 million in funding to sell dome cameras, fisheye lenses, footage viewing stations and the software to monitor it all from anywhere.

    Why sink in so much cash at a valuation triple that of Verkada’s $540 million price tag after its April 2019 Series B? Because Verkada wants to bring two-factor authentication to doors with its new access control system that it’s announcing is now in beta testing ahead of a Spring launch. Instead of just allowing a stealable key fob or badge to open your office entryway, it could ask you to look into a Verkada camera too so it can match your face to your permissions.

    “Our mission is to be the essential physical security software layer for every building, and the foundation of a larger enterprise IoT infrastructure,” Kaliszan tells me. By uniting security cameras and door locks in one system, it could keep banks, schools, hospitals, government buildings and businesses safe while offering new insights on how their spaces are used.

    The founders’ pedigrees don’t hurt its efforts to sell that future to investors like Next47, Sequoia Capital and Meritech Capital, which joined the round. Robertson co-founded IT startup Meraki and sold it to Cisco for $1.2 billion. Kaliszan and his other co-founders Benjamin Bercovitz and James Ren started CourseRank for education software while at Stanford before selling it to Chegg.

    Making a better product than what’s out there isn’t rocket science, though. Many building security systems only let footage be accessed from a control room in the building… which doesn’t help much if everyone’s trying to escape due to emergency or if a manager elsewhere simply wants to take a look. Verkada’s cloud lets the right employees keep watch from mobile, and data is also stored locally on the cameras so they keep recording even if the internet cuts out. “Our competitors stream unencrypted video and it’s on you to protect it. We’re responsible for handling that data,” Kaliszan says.

    Verkada’s machine vision software can make sense of all the footage its cameras collect. “We can immediately show them all the video containing a particular person of interest rather than manually searching through hours of footage,” Kaliszan insists. “Our platform can use AI/machine learning to recognize patterns and behaviors that are out of the norm in real time.”

    For example, a hostage negotiator was able to use Verkada’s system to assess whether a SWAT team needed to invade a building. Verkada can group all spottings of an individual together for review, or scan all the footage for people wearing a certain color or with other search filters.

    Indeed, 2,500 clients, including 25 Fortune 500 companies, are already using Verkada. In the last year it has tripled revenue, partnered with 1,100 resellers, launched nine new camera models, added people and vehicle analytics, opened its first London office and is on track to grow from 300 to 800 employees by the end of 2020.

    “We call this reinvention,” says Felicis Ventures founder and managing director Aydin Senkut. “One thing people underestimate is how big this market is. Honeywell is valued at $110 billion-plus. There’s a Chinese company that’s over $50 billion. The opportunity to be the operating system for all buildings in the world? Sounds like that market couldn’t be better.” Senkut knows Verkada works because he had it installed in all his homes and offices.

    Most enterprise software companies don’t have to worry about the complexities of hardware supply chains. There’s always a risk that its sales process stumbles, leaving it stuck with too many cameras. “We’re still burning money. We’re not there yet or we wouldn’t be raising venture. Because we’re going after a mature market, you can’t come at it with a model that doesn’t make sense. Investors come at it from a hard-nosed approach,” Robertson admits.

    “People have a tendency to write off Verkada as a boring camera company. They don’t realize how access control as the second product is going to supercharge the company’s potential,” Senkut declares.

    One bullet Verkada dodged is the one firmly lodged in Amazon’s chest. Ring security cameras have received stern criticism over Amazon’s cooperation with law enforcement that some see as a violation of privacy and expansion of a police state. “We don’t have any arrangements with law enforcement like Ring,” Kaliszan tells me. “We view ourselves as providing great physical security tools to the people that run schools, hospitals and businesses. The data that those organizations gather is their own.”


    Source: Tech Crunch Startups | Verkada raises M at .6B to be every building’s security OS

    Tech News

    Verkada raises $80M at $1.6B to be every building’s security OS

    January 29, 2020

    Fifty iPads were stolen from Verkada co-founder Hans Robertson’s old company. Only when they checked the security system did they realize the video cameras hadn’t been working for months. He was pissed. “The market lagged behind the progress seen in the consumer space, where someone could buy high-end cameras with cloud-based software to protect their home,” Verkada’s CEO and co-founder Filip Kaliszan tells me of his own attempt to buy enterprise-grade security hardware.

    Usually, startups ascend on the backs of fresh technologies and developer platforms. But Kaliszan and Robertson realized that commercial security was so backward that just implementing the established principles of machine vision and the cloud could create a huge company. The plan was to keep data secure yet accessible and train its cameras to take clearer photos when AI detects suspicious situations instead of just grainy video.

    At first, few could see the vision through the slow upgrade cycles and basement security rooms common with most potential clients. “The seed and the A were extremely difficult rounds to raise compared to the later rounds because people didn’t believe we could execute what were are proposing,” Kaliszan glumly recalls.

    But today Verkada receives a huge vote of confidence. It just raised an $80 million Series C at a stunning $1.6 billion post-money valuation thanks to lead investor Felicis Ventures writing Verkada its biggest check to date. The cash brings Verkada to $139 million in funding to sell dome cameras, fisheye lenses, footage viewing stations and the software to monitor it all from anywhere.

    Why sink in so much cash at a valuation triple that of Verkada’s $540 million price tag after its April 2019 Series B? Because Verkada wants to bring two-factor authentication to doors with its new access control system that it’s announcing is now in beta testing ahead of a Spring launch. Instead of just allowing a stealable key fob or badge to open your office entryway, it could ask you to look into a Verkada camera too so it can match your face to your permissions.

    “Our mission is to be the essential physical security software layer for every building, and the foundation of a larger enterprise IoT infrastructure,” Kaliszan tells me. By uniting security cameras and door locks in one system, it could keep banks, schools, hospitals, government buildings and businesses safe while offering new insights on how their spaces are used.

    The founders’ pedigrees don’t hurt its efforts to sell that future to investors like Next47, Sequoia Capital and Meritech Capital, which joined the round. Robertson co-founded IT startup Meraki and sold it to Cisco for $1.2 billion. Kaliszan and his other co-founders Benjamin Bercovitz and James Ren started CourseRank for education software while at Stanford before selling it to Chegg.

    Making a better product than what’s out there isn’t rocket science, though. Many building security systems only let footage be accessed from a control room in the building… which doesn’t help much if everyone’s trying to escape due to emergency or if a manager elsewhere simply wants to take a look. Verkada’s cloud lets the right employees keep watch from mobile, and data is also stored locally on the cameras so they keep recording even if the internet cuts out. “Our competitors stream unencrypted video and it’s on you to protect it. We’re responsible for handling that data,” Kaliszan says.

    Verkada’s machine vision software can make sense of all the footage its cameras collect. “We can immediately show them all the video containing a particular person of interest rather than manually searching through hours of footage,” Kaliszan insists. “Our platform can use AI/machine learning to recognize patterns and behaviors that are out of the norm in real time.”

    For example, a hostage negotiator was able to use Verkada’s system to assess whether a SWAT team needed to invade a building. Verkada can group all spottings of an individual together for review, or scan all the footage for people wearing a certain color or with other search filters.

    Indeed, 2,500 clients, including 25 Fortune 500 companies, are already using Verkada. In the last year it has tripled revenue, partnered with 1,100 resellers, launched nine new camera models, added people and vehicle analytics, opened its first London office and is on track to grow from 300 to 800 employees by the end of 2020.

    “We call this reinvention,” says Felicis Ventures founder and managing director Aydin Senkut. “One thing people underestimate is how big this market is. Honeywell is valued at $110 billion-plus. There’s a Chinese company that’s over $50 billion. The opportunity to be the operating system for all buildings in the world? Sounds like that market couldn’t be better.” Senkut knows Verkada works because he had it installed in all his homes and offices.

    Most enterprise software companies don’t have to worry about the complexities of hardware supply chains. There’s always a risk that its sales process stumbles, leaving it stuck with too many cameras. “We’re still burning money. We’re not there yet or we wouldn’t be raising venture. Because we’re going after a mature market, you can’t come at it with a model that doesn’t make sense. Investors come at it from a hard-nosed approach,” Robertson admits.

    “People have a tendency to write off Verkada as a boring camera company. They don’t realize how access control as the second product is going to supercharge the company’s potential,” Senkut declares.

    One bullet Verkada dodged is the one firmly lodged in Amazon’s chest. Ring security cameras have received stern criticism over Amazon’s cooperation with law enforcement that some see as a violation of privacy and expansion of a police state. “We don’t have any arrangements with law enforcement like Ring,” Kaliszan tells me. “We view ourselves as providing great physical security tools to the people that run schools, hospitals and businesses. The data that those organizations gather is their own.”

    Source: Tech Crunch Mobiles | Verkada raises M at .6B to be every building’s security OS