Browsing Tag: Startups

Lunar, the Nordic challenger bank that started out life as a personal finance manager app (PFM) but since acquired a full banking license last year, has extended it Series B round with an additional €20 million in funding. It brings the Series B total to €46 million, having disclosed €26 million in August last year.

The Series B extension is led by Seed Capital, with participation from Greyhound, Socii and Augustinus. In addition, I’m told that David Helgason, founder of Unity Technologies, has joined the round.

The mobile-only bank is also announcing that Ole Mahrt, Monzo’s former head of product from 2015-2019, is joining the company’s board of directors. The other non-executive board seats are held by Henning Kruse Pedersen, former CEO of Nykredit, Tuva Palm, former CTO at Nordnet Bank and Director at Klarna, Gary Bramall, CMO of Zoopla and Lars Andersen, general partner at Seed Capital.

Having acquired a banking license, Lunar launched its new bank in March, which it says it built from scratch. Accounts are offered for free, alongside a subscription-based service Lunar Premium. In the coming months, the challenger bank says it plans to launch other new financial products including credit facilities, loans and “sustainability driven services,” in a bit to become a fully-fledged alternative to incumbent banks in the Nordics.

Lunar also offers “Lunar Business,” catering for small business banking, including accounting software integrations, loans and more.

“We are pleased to extend our latest funding round and bolster Lunar’s pan-Nordic play,” says Ken Villum Klausen, founder and CEO of Lunar. “We have a vertical strategy focusing only on the Nordics, allowing us to go deep into the defensive banking infrastructure”.

Meanwhile, Lunar claims more than 150,000 users in the Nordics. The bank has offices in Aarhus, Copenhagen, Stockholm and Oslo, and currently has just over 120 employees.

Source: Tech Crunch Startups | Nordic challenger bank Lunar adds €20M to its Series B

Source: Tech Crunch Startups | Flagship Pioneering raises .1 billion to spend on sustainability and health-focused biotech

Computer vision techniques used for commercial purposes are turning out to be valuable tools for monitoring people’s behavior during the present pandemic. Zensors, a startup that uses machine learning to track things like restaurant occupancy, lines and so on, is making its platform available for free to airports and other places desperate to take systematic measures against infection.

The company, founded two years ago but covered by TechCrunch in 2016, was among the early adopters of computer vision as a means to extract value from things like security camera feeds. It may seem obvious now that cameras covering a restaurant can and should count open tables and track that data over time, but a few years ago it wasn’t so easy to come up with or accomplish that.

Since then Zensors has built a suite of tools tailored to specific businesses and spaces, like airports, offices and retail environments. They can count open and occupied seats, spot trash, estimate lines and all that kind of thing. Coincidentally, this is exactly the kind of data that managers of these spaces are now very interested in watching closely given the present social distancing measures.

Zensors co-founder Anuraag Jain told Carnegie Mellon University — which the company was spun out of — that it had received a number of inquiries from the likes of airports regarding applying the technology to public health considerations.

Software that counts how many people are in line can be easily adapted to, for example, estimate how close people are standing and send an alert if too many people are congregating or passing through a small space.

“Rather than profiting off them, we thought we would give our help for free,” said Jain. And so, for the next two months at least, Zensors is providing its platform for free to “selected entities who are on the forefront of responding to this crisis, including our airport clients.”

The system has already been augmented to answer COVID-19-specific questions, like whether there are too many people in a given area, when a surface was last cleaned and whether cleaning should be expedited, and how many of a given group are wearing face masks.

Airports surely track some of this information already, but perhaps in a much less structured way. Using a system like this could be helpful for maintaining cleanliness and reducing risk, and no doubt Zensors hopes that having had a taste via what amounts to a free trial, some of these users will become paying clients. Interested parties should get in touch with Zensors via its usual contact page.

Source: Tech Crunch Startups | Activity-monitoring startup Zensors repurposes its tech to help coronavirus response

Bluetooth location beacon startup Estimote has adapted its technological expertise to develop a new product designed specifically for curbing the spread of COVID-19. The company created a new range of wearable devices that co-founder Steve Cheney believes can enhance workplace safety for those who have to be co-located at a physical workplace even while social distancing and physical isolation measures are in place.

The devices, called simply the “Proof of Health” wearables, aim to provide contact tracing — in other words, monitoring the potential spread of the coronavirus from person-to-person — at the level of a local workplace facility. The intention is to give employers a way to hopefully maintain a pulse on any possible transmission among their workforces and provide them with the ability to hopefully curtail any local spread before it becomes an outsized risk.

The hardware includes passive GPS location tracking, as well as proximity sensors powered by Bluetooth and ultra-wide-band radio connectivity, a rechargeable battery and built-in LTE. It also includes a manual control to change a wearer’s health status, recording states like certified health, symptomatic and verified infected. When a user updates their state to indicate possible or verified infection, that updates others they’ve been in contact with based on proximity and location-data history. This information is also stored in a health dashboard that provides detailed logs of possible contacts for centralized management. That’s designed for internal use within an organization for now, but Cheney tells me he’s working now to see if there might be a way to collaborate with WHO or other external health organizations to potentially leverage the information for tracing across enterprises and populations, too.

These are intended to come in a number of different form factors: the pebble-like version that exists today, which can be clipped to a lanyard for wearing and displaying around a person’s neck; a wrist-worn version with an integrated adjustable strap; and a card format that’s more compact for carrying and could work alongside traditional security badges often used for facility access control. The pebble-like design is already in production and 2,000 will be deployed now, with a plan to ramp production for as many as 10,000 more in the near future using the company’s Poland-based manufacturing resources.

Estimote has been building programmable sensor tech for enterprises for nearly a decade and has worked with large global companies, including Apple and Amazon . Cheney tells me that he quickly recognized the need for the application of this technology to the unique problems presented by the pandemic, but Estimote was already 18 months into developing it for other uses, including in hospitality industries for employee safety/panic button deployment.

“This stack has been in full production for 18 months,” he said via message. “We can program all wearables remotely (they’re LTE connected). Say a factory deploys this — we write an app to the wearable remotely. This is programmable IoT.

“Who knew the virus would require proof of health vis-a-vis location diagnostics tech,” he added.

Many have proposed technology-based solutions for contact tracing, including leveraging existing data gathered by smartphones and consumer applications to chart transmission. But those efforts also have considerable privacy implications, and require use of a smartphone — something Cheney says isn’t really viable for accurate workplace tracking in high-traffic environments. By creating a dedicated wearable, Cheney says that Estimote can help employers avoid doing something “invasive” with their workforce, since it’s instead tied to a fit-for-purpose device with data shared only with their employers, and it’s in a form factor they can remove and have some control over. Mobile devices also can’t do nearly as fine-grained tracking with indoor environments as dedicated hardware can manage, he says.

And contact tracing at this hyperlocal level won’t necessarily just provide employers with early warning signs for curbing the spread earlier and more thoroughly than they would otherwise. In fact, larger-scale contact tracing fed by sensor data could inform new and improved strategies for COVID-19 response.

“Typically, contact tracing relies on the memory of individuals, or some high-level assumptions (for example, the shift someone worked),” said Brianna Vechhio-Pagán of John Hopkins University’s Applied Physics Lab via a statement. “New technologies can now track interactions within a transmissible, or ~6-foot range, thus reducing the error introduced by other methods. By combining very dense contact tracing data from Bluetooth and UWB signals with information about infection status and symptoms, we may discover new and improved ways to keep patients and staff safe.”

With the ultimate duration of measures like physical distancing essentially up-in-the-air, and some predictions indicating they’ll continue for many months, even if they vary in terms of severity, solutions like Estimote’s could become essential to keeping essential services and businesses operating while also doing the utmost to protect the health and safety of the workers incurring those risks. More far-reaching measures might be needed, too, including general-public-connected, contact-tracing programs, and efforts like this one should help inform the design and development of those.

Source: Tech Crunch Startups | Estimote launches wearables for workplace-level contact tracing for COVID-19

What do you do if you’re an event discovery startup and suddenly it’s illegal to attend events? You lean into the cultural shift and pivot. Today, $11 million-funded calendar app IRL is morphing from In Real Life to In Remote Life. It will now focus on helping people find, RSVP for, plan, share and chat about virtual events, from live-streamed concerts to esports tournaments to Zoom cocktail parties.

Coronavirus could make IRL relevant to a wider audience because before an event “only mattered if it was around you. But now with In Remote Life, content has no geographical limitations,” says IRL co-founder and CEO Abe Shafi. “The need is exponentially greater because everyone’s routines have been shattered.” IRL ranked No. 138 in the U.S. App Store today, making it the top calendar app, even above Google’s (No. 168).

Robinhood’s Josh Elman joins IRL

IRL has some fresh product development talent to lead it through the transition. The startup has hired stock trading app Robinhood’s VP of Product Josh Elman . The former Greylock investor is well known for his product chops from jobs at Facebook, Twitter and LinkedIn. Elman joined Robinhood in early 2018 but left late last year, notably before its rash of recent outages that enraged users.

“I just realized more than anything that the company needed people who had 110% to give, and it wasn’t clear that was going to be me,” Elman said of Robinhood, now valued at $7.6 billion and struggling to scale. “My first passions and all the things I’ve talked about over the years have been social and media.”

For now, IRL is a part-time gig, where he’ll be heading up a Secret Projects division. While most apps “try to suck more of our time,” he sees IRL as a chance to give this precious resource back to people. Though he insists “Robinhood’s great, I’m a very happy shareholder.”

Events without borders

“We were on a tear, hitting a stride with usaging and growth related to real life events,” says Shafi. “Then this happened,” motioning on our Zoom call to the COVID-19 reality we’re now stuck in. “We realized we had to pull all of our content because it wasn’t happening.”

Today IRL’s iOS app launches a redesign of its Discover home screen content to center on virtual events people can attend from home. There’s now tabs for gaming, podcasts, TV and EDU, as well as music, food, lifestyle and a catch-all “fun” section. Each event can be added to your calendar that syncs with Google Cal, or Liked to add it to your profile that friends and fans can follow. You also can instantly launch a group chat about the event in IRL, or share it to Instagram Stories or another messaging app.

If you can’t find something public to do, you can make plans with friends using the composer with suggestions like “Let’s video chat,” “Zoom workout,” “gaming sesh” or “Netflix party.” That instantly sets up a calendar event you can invite people to. And if you’re not sure when you want to host, IRL’s “Soon” option lets you keep the schedule vague so you and friends can figure out when everyone’s available. Indeed, 50% of IRL plans start out as “Soon,” Shafi reveals, identifying a gap in rigid time/date calendars.

Beyond individual events, IRL also wants to make it easier to develop habits by letting you subscribe to workout, meditation and other schedules. With sports seasons suspended, IRL lets people sync with calendars of hip-hop album releases and more instead. Or you can subscribe to an influencer’s life and digitally accompany them to events. The goal is that IRL will be able to merge offline events back into its content recommendations as social distancing subsides.

The biggest challenge for IRL will be tuning its event recommendation algorithm. It has lost a lot of the traditional relevance signals about events, like how close they are to your home, how much they cost or if they’re even in your city. Transitioning to In Remote Life means a global range of happenings is now available to everyone, and because they’re often free to host, many lonely low-quality events have sprung up. That makes it much tougher for IRL to determine what to show.

For now, it’s basing recommendations on what you engage with most on its home screen, but I found that can make the initial experience very hit-or-miss. The top events in each category were rarely exciting. But IRL is planning to beef up its onboarding process to ask about your interests, and integrate with Spotify so it knows which musicians’ online concerts you’d want to attend.

Still, Shafi thinks IRL is already better than asocial alternatives. “Our main age range is 13 to 25, college and post-college metropolitan areas and across college campuses. Our average user has never used a calendar before, or they’ve just used a default calendar like Gcal or iCal.

A cure for loneliness

Hopefully, IRL will take a more serious swing at helping friends realize they’re free at the same time and can hang out. While Down To Lunch failed in this space, now Facebook Messenger and Instagram are exploring it with their auto-status feature, and location apps like Snap Map and Zenly could adapt to share not just where you are, but if you have the intention to hang out.

“How can we use just a little bit of nudging, transparency or suggestion to get people to just do one more thing per month?,” Shafi asks. IRL is trying to figure out how to let you passively share that “I have 2 hours free” in a way that “never makes you feel rejected if they don’t respond.”

Facebook did launch a standalone Events calendar app back in 2016, but later paired down the calendaring features, folded it in with restaurant recommendations and renamed it Local. “As big as Facebook is, it can only do so many things insanely well,” Elman says of his old employer. “They could do more [on Events], but it’s never been the juggernaut like photos.”

Shafi is happy to have the opportunity in such a foundational space. He describes the concept of the calendar as one he’s sure will outlive him, so it’s worth the effort to make it social no matter how long it takes — though I’m sure his investors like Goodwater Capital, Founders Fund, Kleiner Perkins and Floodgate hope it’ll find a way to monetize eventually.

Revenue could come in the form of selling access to events through the app, or letting promoters and local businesses pay for enhanced discovery. For now, though, IRL is building a deeper connection with event and content publishers with the upcoming launch of its free Add To Calendar button they can build into their sites and emails. Elman says several services charge for these buttons that integrate with Apple and Google’s calendars, but IRL hopes giving them away will help fill its app with things to do, whatever that might be.

“Our tagline is ‘live your best life.’ It’s not judgmental. If your best life is playing video games on your couch with your homies, we don’t judge you for that.”

Source: Tech Crunch Startups | IRL pivots into virtual event calendar In Remote Life

As the largest federal stimulus package in the history of the United States, the Coronavirus Aid, Relief and Economic Security Act, injects a planned $2.2 trillion into the U.S. economy, fintech startups are angling to get a seat at the table when it comes to distributing the cash.

“In the last crisis, banks stepped away from the kinds of lending that our members do,” says Scott Stewart, the head of the Innovative Lending Platform Association. “The bank process [for lending] is quite lengthy. Our members are underwriting loans using algorithms at speed and scale.”

Under the CARES Act, roughly $450 billion in loans are set to be distributed through the Small Business Administration and other entities. While Congress is still working out the details, fintech companies are thinking that they should — and will — have a role to play getting stimulus money into the hands of entrepreneurs.

“The Treasury Department and the SBA have the authority and have been instructed in the legislation to allow us into the room,” says Stewart. “We will have to go through some sort of process to become qualified non-bank lenders.”

The argument for handing some of the responsibility for distributing the stimulus dollars to startups to disburse comes from the ability of these companies to approve loans faster than typical banks.

Source: Tech Crunch Startups | Lending startups are angling for new business from the COVID-19 bailout

The global coronavirus pandemic has already caused a tremendous strain on healthcare resources around the world, and it’s leading to a shift in how healthcare is offered. Startup Forward, which debuted in 2016 and has since expanded its tech-focused primary care medical practice to locations in major cities across the U.S., is launching a new initiative called “Forward At Home” that reflects those changes and adapts its care model accordingly.

Forward’s primary differentiator is its focus on what it terms a patient’s “baseline,” which is established by an in-person visit they make when they join; it employs a body scanner at a doctor’s office to take a number of readings and produces an interactive chart displayed on-screen in the doctor’s exam room. Forward founder and CEO Adrian Aoun, who previously led special projects at Google before building the health tech company, said that as the company has ramped its efforts to support patients during the COVID-19 pandemic, including through in-clinic and drive-through testing, it also wanted to address the ongoing need for care for non-COVID patients.

“If people aren’t leaving their homes, and frankly, you don’t really want them to leave their homes unless you need them to, you have to figure out how to do all that remotely,” Aoun said in an interview, referring to Forward’s comprehensive biometric data gathering process. “So we’ve implemented a bunch of different things as rapidly as possible. The first is, how do we collect some biometrics — so we put together a kit that has a bunch of sensors in it that we actually mail to you. This includes an EKG, a connected thermometer, connected blood pressure cuff and a pulse oximeter.”

This approach provides a whole new level of remote care, over and above what’s typically defined as “telemedicine,” which generally amounts to little more than video calls with doctors, Aoun points out. Forward’s approach includes automated vitals monitoring for alerting a doctor if a patient needs intervention, and a patient has access to all their own data in the app as well. The Forward At Home product also takes their exam room smart display and brings it to their mobile devices, presenting it for shared consultation between doctor and patient during viral visits, which are available 24/7 to Forward members.

At launch, the service also includes home visits to collect urine and blood samples, as an added measure designed specifically to help patients adhere to CDC and health agency guidelines around self-isolation, while also getting a detailed and thorough level of care. Aoun says that this part of the offering doesn’t make sense at scale, and will likely revert to in-clinic visits once the COVID-19 crisis passes.

The rest of the model, though spurred into deployment because of the coronavirus conditions, and the need to limit the number of people going in to medical facilities and hospital all across the country unless they absolutely need to, is here to stay, however. Aoun says that Forward’s goal has always been to address the need for tech-friendly, advanced and comprehensive primary care for everyone, but that it took an approach similar to Tesla’s by addressing the top end of the market first in order to be able to fund development of more broadly available services later on.

Meanwhile, the need to shift as much care as possible to in-home is pressing, and evidence from countries around the world is increasingly pointing to how important that is to stopping the spread.

“The big thing to flatten the curve, the whole point of it, is that the hospitals are going to be overrun,” Aoun said. “So you want to take as many cases as you can, where they don’t actually have to be in the ICU, and treat them outside of the ICU — that’s your first principle. Then your second principle is, and China kind of discovered this early […] they started moving to getting people out of the hospitals, as much as possible for a second reason, which is not that the hospitals are overloaded, but that the hospitals are one of the fastest ways to spread COVID-19.”

That’s a perspective also supported by lessons shared from Italian medical professionals in their effort to deal with the COVID-19 situation there, which has essentially decimated large parts of their medical facility infrastructure.

Forward is also still continuing the other work it’s doing to address COVID-19 needs, including providing its risk assessment screening tool to all, as well as offering testing via clinics and drive-throughs to members, as well as mental health support. It’s also looking to expand its drive-through testing to new sites across the U.S. The Forward At Home initiative, meanwhile, will help ensure that clients who have other pressing health needs aren’t left behind while the effort to combat COVID-19 continues.

Source: Tech Crunch Startups | Forward launches ‘Forward At Home’ primary care service to address COVID-19 healthcare crunch

Celularity, the venture-backed developer of novel cell therapies for cancer treatments, has received an initial clearance from the Food and Drug Administration to begin early-stage clinical trials on a potential treatment for COVID-19.

The company, which has raised at least $290 million to date (according to Crunchbase), uses “Natural Killer” (NK) cell therapies to boost the immune system’s disease-fighting response.

For Celularity, those NK cells are derived from stem cells cultivated from placental tissue, which hospitals typically treat as medical waste.

Backed by the venture investment firm Section 32, and strategic investors including Celgene, now a division of Bristol Myers; United Therapeutics, a biomedical technology developer; Human Longevity, the troubled venture-backed startup founded by J. Craig Venter; and Sorrento Therapeutics, a publicly traded biomedical company, Celularity was pursuing a number of applications of the novel cell therapy, but its initial focus was on cancer treatments.

The real breakthrough for the company, and one of the reasons it has attracted so much capital, is that its cell therapies don’t need to be cultivated from a patient donor — a lengthy and expensive process. Celularity is able to produce NK cells and store them, so that they can be ready for transfusion when they’re needed.

With the the FDA’s clearance, Celularity is going to begin a small, 86-person trial to test the efficacy of its CYNK-001 immunotherapy to treat COVID-19 infected adults, the company said.

There are at least two studies underway in China that are also testing whether Natural Killer cells can be used to treat COVID-19.

NK cells are a type of white blood cell that are part of the body’s immune system. Unlike t-cells, which target particular pathogens, NK cells typically work to support the immune system by identifying and destroying cells in the body that appear to be stressed, either from an infection or a mutation.

The therapy seems to be successful in treating certain types of cancer, and the company’s researchers speculate that it can provide similar results in stopping the ability of the novel coronavirus, which causes COVID-19 to spread throughout the body.

However, there are some potential roadblocks and risks to pursuing the NK therapy. Chiefly, COVID-19 is deadly in part because it can push the immune system into overdrive. The “cytokine storm” that results from the infection means that the body starts attacking healthy cells in the lungs, which leads to organ failure and death. If that’s the case, then boosting the immune response to COVID-19 might be dangerous for patients.

There’s also the possibility that NK cells might not be able to detect which cells are infected with the coronavirus which causes COVID-19, rendering the therapy ineffective.

“Studies have established that there is robust activation of NK cells during viral infection regardless of the virus class,” said Celularity’s chief scientific officer, Xiaokui Zhang, in a statement. “These functions suggest that CYNK-001 could provide a benefit to COVID-19 patients in terms of limiting SARS-CoV-2 replication and disease progression by eliminating the infected cells.”

Source: Tech Crunch Startups | Venture-backed Celularity receives FDA approval for early trials of a new cell therapy for COVID-19

Social entrepreneurship pioneer Jim Fruchterman has launched a new nonprofit, Tech Matters, with $1.7 million in backing from corporate and foundation sources, including Twilio, Okta, Working Capital, Facebook and Schmidt Futures.

Tech Matters is Fruchterman’s new vehicle to address what he sees as a crippling weakness in the social good sector: the failure to use technology the way technologically savvy for-profits do. 

“The social change sector has huge problems and is 10-20 years behind the times. People are finally waking up to the fact that if they really want to do social good at scale that’s going to involve software and data technology,” says Fruchterman. “The mission is to bring the benefits of technology to all of humanity, not the richest 5% of it.”

In order to have the broadest possible impact, Tech Matters is aiming for wins at the technology systems level that can benefit multiple organizations facing similar challenges. 

The firm’s first partnership is with Child Helpline International, which is working with Tech Matters to create a common platform for 170 groups around the world providing hotlines for children facing crises such as drug and sexual abuse. Twilio.org, the social good arm of Twilio, is providing $300,000 to support the project, as well as Twilio’s Flex contact center platform.

Jim Fuchterman with TechCrunch reporter Megan Rose Dickey at TechCrunch Sessions: Blockchain in Zug, Switzerland, 2018.

Today, most of those 170 hotlines are either iffy hacks running on a computer somewhere or dependent on a volunteer, a phone and a pad of paper. The new platform will enable volunteers to track inbound messaging via SMS, voice, WhatsApp and WeChat.

“It is super compelling to be able to help 170 helplines with one partnership,” says Erin Reilly, Twilio’s chief social impact officer. “Tech Matters has the technical expertise and staff to build this. We are confident they can execute and we are honored to play a small part.”

Tech Matters is in many ways a continuation of what Fruchterman started in 1989 with his first nonprofit, the Palo Alto-based Benetech.

Fruchterman, a Caltech engineering grad, MacArthur Fellow and successful entrepreneur, set up Benetech to raise capital, much the same way venture firms do, to support technologically sophisticated approaches to social problems, especially in the disabilities and human rights fields.

Benetech’s biggest success was to win the U.S. Department of Education’s contract for Bookshare, the federal program that funds reading materials for the blind. Benetech won the contract by digitizing the materials that were formerly cassette tapes and Braille books, which in turn reduced costs, improved the service to readers and expanded services. In 2017, Benetech won the five-year, $42.5 million contract for the third time. 

Fruchterman handed leadership of Benetech to Betsy Beaumon in 2018 and left to start work on Tech Matters. Asked what’s different this time, Fruchterman says Tech Matters is structured so that he can concentrate on helping figure out systems solutions that have broad relevance to the social sector, as well as provide consulting to nonprofits pondering technology investments.

“At Benetech, raising money to support an 80-person team and a $15 million budget took 80% of my time,” he says. “Now fundraising is more like 20% and I am liberated to actually do the advising I want to do. Basically I provide free consulting, though more often it’s free anti-consulting, because most of my job is talking people out of bad tech ideas.” 

Fruchterman is also writing a book to help get his message out as broadly as possible to nonprofits. “One chapter I’m itching to write,” he says, is “The Five Bad Tech for Good Ideas,” which everybody tries first, like the app nobody will download, the blockchain as your first significant database project, the One True List and so on.”

With the COVID-19 crisis now raging, Fruchterman is especially eager to take on a close cousin to the crisis text hotline project. “My dream even before the pandemic was to work with some of the cloud companies to create a fully functional crisis contact center in a box solution. The idea is that we could quickly provision solutions that would allow a new hotline to turn on in hours or a day at most.”

Additional backers of Tech Matters include EcoAgriculture Partners, FJC, the Hitz Family Foundation, the Peery Foundation and the Ray and Dagmar Dolby Fund.

Source: Tech Crunch Startups | Jim Fruchterman raises .7M for Tech Matters, a new effort to help nonprofits do tech better

In this world, there is no such thing as perfect security.

Every app or service you use — even the websites you visit — have security bugs. Companies go through repeated rounds of testing, code reviews and audits — sometimes even bringing in third-parties. Bugs get missed — that’s life, and it happens — but when they are uncovered, companies can get hacked.

That’s where a bug bounty comes into play. A bug bounty is an open-door policy to anyone who finds a bug or a security flaw; they are critical for channeling those vulnerabilities back to your development team so they can be fixed before bad actors can exploit them.

Bug bounties are an extension of your internal testing process and incentivize hackers to report bugs and issues and get paid for their work rather than dropping details of a vulnerability out of the blue (aka a “zero-day”) for anyone else to take advantage of.

Bug bounties are a win-win, but paying hackers for bugs is only one part of the process. As is usually the case where security meets startup culture, getting the right system in place early is best.

Why you need a vulnerability disclosure program

A bug bounty is just a small part of the overall bug-hunting and remediating process.

Source: Tech Crunch Startups | A bug bounty alone won’t save your startup — here’s why