Pages Navigation Menu

The blog of DataDiggers

Categories Navigation Menu

Warung Pintar raises $27.5M to digitize Indonesia’s street vendors

Posted by on Jan 21, 2019 in Asia, Bukalapak, China, digital-garage, East Ventures, economy, funding, Fundings & Exits, go-jek, Indonesia, Jakarta, kiosks, line ventures, Marketing, online marketplaces, president, Southeast Asia, Tokopedia, traveloka, United States, Yahoo | 1 comment

The digital revolution in Indonesia, Southeast Asia’s largest economy, continues to attract big money from investors. Hot on the heels of a $50 million round for Bukalapak, a billion-dollar company helping street stall traders to tap the internet, so Warung Pintar, another startup helping digitize the country’s vendors, has pulled in $27.5 million for growth.

Bukalapak is one of Indonesia’s largest e-commerce services and it began catering to local merchants, those who sell product via road-side kiosks, last year, but eighteen-month-old Warung Pintar is focused exclusively on those vendors.

Bukalapak helps them to gain scale through online orders — it claims to have a base of 50 million registered users in Indonesia — but Warung Pintar digitizes kiosk vendors to the very core. At the most basic level, that means aesthetics; so all Warung Pintar vendors get a bright and colorfully-designed kiosk. They also get access to technology that includes a digital POS, free Wi-Fi for customers, an LCD screen for displays, power bank chargers and more.

It’s a ‘smart kiosk’ concept, essentially.

The project was founded in 2007 by East Ventures, a prolific early-stage investor that has backed unicorns like Tokopedia, Traveloka and Mercari. This new money means that Warung Pintar has now raised just over $35 million from investors to date.

The round — which is a Series B — included participation from existing backers SMDV, Vertex, Pavilion Capital, Line Ventures, Digital Garage, Agaeti, Triputra, Jerry Ng, and EV Growth — the joint fund from East Ventures and Yahoo. They were joined by OVO — a payment firm jointly owned by Indonesian mega-conglomerate Lippo — which has signed on as a new investor and is sure to be highly strategic in nature. OVO works with the likes of Grab, and it is battling to gain a foothold in Indonesia’s fledgling digital payments space, which is tipped to boom among the country’s 260 million population.

A Warung Pintar kiosk in Jakarta, Indonesia

These investors are all betting that Warung Pintar can take off and provide greater functionality for street vendors and consumers alike.

The startup is in growth mode right now so it isn’t fully focused on monetization. The only fee is $5,000 from the vendor, which covers the cost of a new prefab kiosk, while all the tech appliances are provided without fee to help kiosk owners engage with the local community. For example, East Ventures noticed that drivers for Go-Jek or Grab tended to hang around the kiosk store near the VC firm’s office and they were curious how to grow engagement to benefit both parties.

“There are going to be a lot of ways to charge and make money,” East Ventures co-founder and managing partner Willson Cuaca told TechCrunch in an interview. “Once we have built enough, we can manage the supply chain and then figure out of how to make money.”

Indeed, monetization might not be via fees to the kiosk owners themselves, explained Cuaca — who is president of Warung Pintar. Since the company maintains touch points with consumers, it is a commodity that can appeal to brands, manufacturers and others when it reaches nationwide scale.

While there has been promising progress and product market fit in Jakarta, Cuaca and his team see significant growth potential still to be realized.

When we spoke to Warung Pintar just under a year ago, it had just raised a seed round and had been in operation for under six months. Today, the business counts 1,150 kiosks in Jakarta. However, it recently opened up in Banyuwangi, East Java, which, alongside other planned expansions, is aimed to increase its reach to 5,000 kiosks before the end of this year, Cuaca said.

There’s no plan for regional expansion at this point, he added.

The business and model is fascinating but it is conceived and executed in Indonesia, that’s to say it isn’t a problem that could be identified, mapped and solved from the U.S, China or other markets. It’s the type of tech and startup that is helping change daily lives in Indonesia, the world’s fourth largest country by population. Home-grown solutions have been rare in Southeast Asia, but there are increasing opportunities that only local players can cater to and now the region’s VC corpus is substantial enough to provide the capital needed.


Source: The Tech Crunch

Read More

How open source software took over the world

Posted by on Jan 12, 2019 in apache, author, cloud computing, Cloudera, cockroach labs, Column, computing, Databricks, designer, executive, free software, Getty, GitHub, HashiCorp, hortonworks, IBM, linus torvalds, linux, Microsoft, microsoft windows, mongo, MongoDB, mulesoft, mysql, open source software, operating system, operating systems, oracle, red hat, RedHat, sap, Software, software as a service, TC, Yahoo | 0 comments

It was just 5 years ago that there was an ample dose of skepticism from investors about the viability of open source as a business model. The common thesis was that Redhat was a snowflake and that no other open source company would be significant in the software universe.

Fast forward to today and we’ve witnessed the growing excitement in the space: Redhat is being acquired by IBM for $32 billion (3x times its market cap from 2014); Mulesoft was acquired after going public for $6.5 billion; MongoDB is now worth north of $4 billion; Elastic’s IPO now values the company at $6 billion; and, through the merger of Cloudera and Hortonworks, a new company with a market cap north of $4 billion will emerge. In addition, there’s a growing cohort of impressive OSS companies working their way through the growth stages of their evolution: Confluent, HashiCorp, DataBricks, Kong, Cockroach Labs and many others. Given the relative multiples that Wall Street and private investors are assigning to these open source companies, it seems pretty clear that something special is happening.

So, why did this movement that once represented the bleeding edge of software become the hot place to be? There are a number of fundamental changes that have advanced open source businesses and their prospects in the market.

David Paul Morris/Bloomberg via Getty Images

From Open Source to Open Core to SaaS

The original open source projects were not really businesses, they were revolutions against the unfair profits that closed-source software companies were reaping. Microsoft, Oracle, SAP and others were extracting monopoly-like “rents” for software, which the top developers of the time didn’t believe was world class. So, beginning with the most broadly used components of software – operating systems and databases – progressive developers collaborated, often asynchronously, to author great pieces of software. Everyone could not only see the software in the open, but through a loosely-knit governance model, they added, improved and enhanced it.

The software was originally created by and for developers, which meant that at first it wasn’t the most user-friendly. But it was performant, robust and flexible. These merits gradually percolated across the software world and, over a decade, Linux became the second most popular OS for servers (next to Windows); MySQL mirrored that feat by eating away at Oracle’s dominance.

The first entrepreneurial ventures attempted to capitalize on this adoption by offering “enterprise-grade” support subscriptions for these software distributions. Redhat emerged the winner in the Linux race and MySQL (thecompany) for databases. These businesses had some obvious limitations – it was harder to monetize software with just support services, but the market size for OS’s and databases was so large that, in spite of more challenged business models, sizeable companies could be built.

The successful adoption of Linux and MySQL laid the foundation for the second generation of Open Source companies – the poster children of this generation were Cloudera and Hortonworks. These open source projects and businesses were fundamentally different from the first generation on two dimensions. First, the software was principally developed within an existing company and not by a broad, unaffiliated community (in the case of Hadoop, the software took shape within Yahoo!) . Second, these businesses were based on the model that only parts of software in the project were licensed for free, so they could charge customers for use of some of the software under a commercial license. The commercial aspects were specifically built for enterprise production use and thus easier to monetize. These companies, therefore, had the ability to capture more revenue even if the market for their product didn’t have quite as much appeal as operating systems and databases.

However, there were downsides to this second generation model of open source business. The first was that no company singularly held ‘moral authority’ over the software – and therefore the contenders competed for profits by offering increasing parts of their software for free. Second, these companies often balkanized the evolution of the software in an attempt to differentiate themselves. To make matters more difficult, these businesses were not built with a cloud service in mind. Therefore, cloud providers were able to use the open source software to create SaaS businesses of the same software base. Amazon’s EMR is a great example of this.

The latest evolution came when entrepreneurial developers grasped the business model challenges existent in the first two generations – Gen 1 and Gen 2 – of open source companies, and evolved the projects with two important elements. The first is that the open source software is now developed largely within the confines of businesses. Often, more than 90% of the lines of code in these projects are written by the employees of the company that commercialized the software. Second, these businesses offer their own software as a cloud service from very early on. In a sense, these are Open Core / Cloud service hybrid businesses with multiple pathways to monetize their product. By offering the products as SaaS, these businesses can interweave open source software with commercial software so customers no longer have to worry about which license they should be taking. Companies like Elastic, Mongo, and Confluent with services like Elastic Cloud, Confluent Cloud, and MongoDB Atlas are examples of this Gen 3.  The implications of this evolution are that open source software companies now have the opportunity to become the dominant business model for software infrastructure.

The Role of the Community

While the products of these Gen 3 companies are definitely more tightly controlled by the host companies, the open source community still plays a pivotal role in the creation and development of the open source projects. For one, the community still discovers the most innovative and relevant projects. They star the projects on Github, download the software in order to try it, and evangelize what they perceive to be the better project so that others can benefit from great software. Much like how a good blog post or a tweet spreads virally, great open source software leverages network effects. It is the community that is the source of promotion for that virality.

The community also ends up effectively being the “product manager” for these projects. It asks for enhancements and improvements; it points out the shortcomings of the software. The feature requests are not in a product requirements document, but on Github, comments threads and Hacker News. And, if an open source project diligently responds to the community, it will shape itself to the features and capabilities that developers want.

The community also acts as the QA department for open source software. It will identify bugs and shortcomings in the software; test 0.x versions diligently; and give the companies feedback on what is working or what is not.  The community will also reward great software with positive feedback, which will encourage broader use.

What has changed though, is that the community is not as involved as it used to be in the actual coding of the software projects. While that is a drawback relative to Gen 1 and Gen 2 companies, it is also one of the inevitable realities of the evolving business model.

Linus Torvalds was the designer of the open-source operating system Linux.

Rise of the Developer

It is also important to realize the increasing importance of the developer for these open source projects. The traditional go-to-market model of closed source software targeted IT as the purchasing center of software. While IT still plays a role, the real customers of open source are the developers who often discover the software, and then download and integrate it into the prototype versions of the projects that they are working on. Once “infected”by open source software, these projects work their way through the development cycles of organizations from design, to prototyping, to development, to integration and testing, to staging, and finally to production. By the time the open source software gets to production it is rarely, if ever, displaced. Fundamentally, the software is never “sold”; it is adopted by the developers who appreciate the software more because they can see it and use it themselves rather than being subject to it based on executive decisions.

In other words, open source software permeates itself through the true experts, and makes the selection process much more grassroots than it has ever been historically. The developers basically vote with their feet. This is in stark contrast to how software has traditionally been sold.

Virtues of the Open Source Business Model

The resulting business model of an open source company looks quite different than a traditional software business. First of all, the revenue line is different. Side-by-side, a closed source software company will generally be able to charge more per unit than an open source company. Even today, customers do have some level of resistance to paying a high price per unit for software that is theoretically “free.” But, even though open source software is lower cost per unit, it makes up the total market size by leveraging the elasticity in the market. When something is cheaper, more people buy it. That’s why open source companies have such massive and rapid adoption when they achieve product-market fit.

Another great advantage of open source companies is their far more efficient and viral go-to-market motion. The first and most obvious benefit is that a user is already a “customer” before she even pays for it. Because so much of the initial adoption of open source software comes from developers organically downloading and using the software, the companies themselves can often bypass both the marketing pitch and the proof-of-concept stage of the sales cycle. The sales pitch is more along the lines of, “you already use 500 instances of our software in your environment, wouldn’t you like to upgrade to the enterprise edition and get these additional features?”  This translates to much shorter sales cycles, the need for far fewer sales engineers per account executive, and much quicker payback periods of the cost of selling. In fact, in an ideal situation, open source companies can operate with favorable Account Executives to Systems Engineer ratios and can go from sales qualified lead (SQL) to closed sales within one quarter.

This virality allows for open source software businesses to be far more efficient than traditional software businesses from a cash consumption basis. Some of the best open source companies have been able to grow their business at triple-digit growth rates well into their life while  maintaining moderate of burn rates of cash. This is hard to imagine in a traditional software company. Needless to say, less cash consumption equals less dilution for the founders.

Photo courtesy of Getty Images

Open Source to Freemium

One last aspect of the changing open source business that is worth elaborating on is the gradual movement from true open source to community-assisted freemium. As mentioned above, the early open source projects leveraged the community as key contributors to the software base. In addition, even for slight elements of commercially-licensed software, there was significant pushback from the community. These days the community and the customer base are much more knowledgeable about the open source business model, and there is an appreciation for the fact that open source companies deserve to have a “paywall” so that they can continue to build and innovate.

In fact, from a customer perspective the two value propositions of open source software are that you a) read the code; b) treat it as freemium. The notion of freemium is that you can basically use it for free until it’s deployed in production or in some degree of scale. Companies like Elastic and Cockroach Labs have gone as far as actually open sourcing all their software but applying a commercial license to parts of the software base. The rationale being that real enterprise customers would pay whether the software is open or closed, and they are more incentivized to use commercial software if they can actually read the code. Indeed, there is a risk that someone could read the code, modify it slightly, and fork the distribution. But in developed economies – where much of the rents exist anyway, it’s unlikely that enterprise companies will elect the copycat as a supplier.

A key enabler to this movement has been the more modern software licenses that companies have either originally embraced or migrated to over time. Mongo’s new license, as well as those of Elastic and Cockroach are good examples of these. Unlike the Apache incubated license – which was often the starting point for open source projects a decade ago, these licenses are far more business-friendly and most model open source businesses are adopting them.

The Future

When we originally penned this article on open source four years ago, we aspirationally hoped that we would see the birth of iconic open source companies. At a time where there was only one model – Redhat – we believed that there would be many more. Today, we see a healthy cohort of open source businesses, which is quite exciting. I believe we are just scratching the surface of the kind of iconic companies that we will see emerge from the open source gene pool. From one perspective, these companies valued in the billions are a testament to the power of the model. What is clear is that open source is no longer a fringe approach to software. When top companies around the world are polled, few of them intend to have their core software systems be anything but open source. And if the Fortune 5000 migrate their spend on closed source software to open source, we will see the emergence of a whole new landscape of software companies, with the leaders of this new cohort valued in the tens of billions of dollars.

Clearly, that day is not tomorrow. These open source companies will need to grow and mature and develop their products and organization in the coming decade. But the trend is undeniable and here at Index we’re honored to have been here for the early days of this journey.


Source: The Tech Crunch

Read More

With trust destroyed, Facebook is haunted by old data deals

Posted by on Dec 19, 2018 in Apps, BlackBerry, Facebook, facebook platform, Facebook Policy, facebook privacy, Mobile, Netflix, Social, Spotify, TC, Yahoo | 1 comment

As Facebook colonized the rest of the web with its functionality in hopes of fueling user growth, it built aggressive integrations with partners that are coming under newfound scrutiny through a deeply reported New York Times investigationSome of what Facebook did was sloppy or unsettling, including forgetting to shut down APIs when it cancelled its Instant Personalization feature for other sites in 2014, and how it used contact syncing to power friend recommendations.

But other moves aren’t as bad as they sound. Facebook did provide Spotify and Netflix the ability to access users messages, but only so people could send friends songs or movies via Facebook messages without leaving those apps. And Facebook did let Yahoo and Blackberry access people’s News Feeds, but to let users browse those feeds within social hub features inside those apps. These partners could only access data when users logged in and connected their Facebook accounts, and were only approved to use this data to provide Facebook-related functionality. That means Spotify at least wasn’t supposed to be rifling through everyone’s messages to find out what bands they talk about so it could build better curation algorithms, and there’s no evidence yet that it did.

Thankfully Facebook has ditched most of these integrations, as the dominance of iOS and Android have allowed it to build fewer, more standardized, and better safeguarded access points to its data. And it’s battened down the hatches in some ways, forcing users to shortcut from Spotify into the real Facebook Messenger rather than giving third-parties any special access to offer Facebook Messaging themselves.

The most glaring allegation Facebook hasn’t adequately responded to yet is that it used data from Amazon, Yahoo, and Huawei to improve friend suggestions through People You May Know — perhaps its creepiest feature. The company needs to accept the loss of growth hacking trade secrets and become much more transparent about how it makes so uncannily accurate recommendations of who to friend request — as Gizmodo’s Kashmir Hill has documented.

In some cases, Facebook has admitted to missteps, with its Director of Developer Platforms and Programs Konstantinos Papamiltiadis writing “we shouldn’t have left the APIs in place after we shut down instant personalization.”

In others, we’ll have decide where to draw the line between what was actually dangerous and what gives us the chills at first glance. You don’t ask permission from friends to read an email from them on a certain browser or device, so should you worry if they saw your Facebook status update on a Blackberry social hub feature instead of the traditional Facebook app? Well that depends on how the access is monitored and meted out.

The underlying question is whether we trust that Facebook and these other big tech companies actually abided by rules to oversee and not to overuse data. Facebook has done plenty wrong, and after repeatedly failing to be transparent or live up to its apologies, it doesn’t deserve the benefit of the doubt. For that reason, I don’t want it giving any developer — even ones I normally trust like Spotify — access to sensitive data protected merely by their promise of good behavior despite financial incentives for misuse.

Facebook’s former chief security officer Alex Stamos tweeted that “allowing for 3rd party clients is the kind of pro-competition move we want to see from dominant platforms. For ex, making Gmail only accessible to Android and the Gmail app would be horrible. For the NY Times to try to scandalize this kind of integration is wrong.” But countered that by noting that “integrations that are sneaky or send secret data to servers controlled by others really is wrong.”

Even if Spotify and Netflix didn’t abuse the access Facebook provided, there’s always eventually a Cambridge Analytica. Tech companies have proven their word can’t necessarily be trusted. The best way to protect users is to properly lock down the platforms with ample vetting, limits, and oversight so there won’t be gray areas that require us to put our faith in the kindness of businesses.


Source: The Tech Crunch

Read More

HQ Trivia and Vine co-founder Colin Kroll found dead of suspected overdose

Posted by on Dec 16, 2018 in Colin Kroll, HQ, HQ Trivia, Personnel, right media, Rus Yusupov, Social, vine, Yahoo | 0 comments

Colin Kroll, the 35-year-old co-founder and CEO of the HQ Trivia app, has been found dead of an apparent drug overdose in his apartment, TechCrunch has confirmed.

A spokesman for the NYPD told us that a female called 911 for a wellness check on Kroll’s apartment and he was found dead inside at 08:00 hours today.

The police department said the investigation is ongoing but added that the cause of death is “allegedly a drug overdose”.

“We’re still waiting on the ME’s report to confirm that,” he added.

The story was reported earlier by TMZ — which cites a police source saying cocaine and heroin were believed to be involved.

In a brief statement, HQ said: “We learned today of the passing of our friend and founder, Colin Kroll, and it’s with deep sadness that we say goodbye. Our thoughts go out to his family, friends and loved ones during this incredibly difficult time.”

Kroll was only named CEO of the HQ Trivia mobile game show app three months ago, replacing fellow co-founder Rus Yusupov who moved over to serve as chief creative officer.

Prior to taking the CEO role Kroll served as HQ’s CTO. He co-founded the startup in 2015, a few months after moving on from Vine — the Twitter-owned short video format startup which got closed down in 2017.

It’s not clear who will take over the CEO role for HQ Trivia at this stage but Yusupov looks a likely candidate, at least in the interim.

In recent months the startup has been beta testing a follow up mobile game show, called HQ Words. Its original trivia format show airs twice per day and awards winners as much as $100,000 for successfully answering 12 questions.

The app debuted last August and was a viral success. But the question hanging over HQ Trivia and its co-founders has increasingly been how to sustain an early winning streak, once the novelty of the original show ran its course.

As we reported previously, HQ Trivia’s ranking in the app store has been steadily decreasing in recent months.

Kroll started his career as a software engineer at Right Media, which went on to be acquired by Yahoo in 2006. From then until 2011, he led the engineering team in Yahoo’s search and advertising tech group before joining luxury travel site Jetsetter as VP of Product — where he went on to be promoted to CTO.

In 2012 he left to start Vine with co-founders Dominik Hofmann and Yusopov.


Source: The Tech Crunch

Read More

Yahoo still scans your emails for ads — even if its rivals won’t

Posted by on Aug 28, 2018 in AOL, gmail, law enforcement, machine learning, Outlook.com, Privacy, Security, webmail, Yahoo | 0 comments

You’re not the only one reading your emails.

A deep dive in The Wall Street Journal on Tuesday dug out new details on a massive email scanning operation by Oath, the Verizon-owned subsidiary that’s the combined business of AOL and Yahoo. The email-scanning program analyzes over 200 million AOL and Yahoo inboxes for data that can be sold to advertisers. (Disclosure: TechCrunch is owned by Verizon by way of Oath.)

The logic goes that by learning about its users, the internet giant can hone its ad-targeting effort to display the most relevant ads.

But where other major email providers have bailed from email scanning amid privacy scandals and security issues, Oath remains the outlier.

Google ended its ad-targeting email-scanning operation across its consumer Gmail service last year — a decision lauded after facing criticism for years over the practice — though the company still uses machine learning to help you reply to emails. Meanwhile, Microsoft told TechCrunch in a statement that it does “not use email content for ad targeting in any way, anywhere in Microsoft.” And Apple has never scanned its customers’ inboxes for advertising, though its privacy policy says it can access your data for law enforcement purposes or for more vague reasons like “issues of public importance.”

So it’s basically just Oath, then.

Scanning the inboxes of its hundreds of millions of email users is a gutsy move for the year-old internet giant, which prior to its rebranding was responsible for two data breaches at Yahoo exposing more than thee billion users’ data and a separate breach at AOL in 2014. Yahoo reportedly built a secret customer email-scanning tool at the behest of the U.S. intelligence community, which led to the departure of former Yahoo infosec chief Alex Stamos, who until recently was Facebook’s chief security officer.

Although the email scanning program isn’t new — announced earlier this year — it does go deeper than Gmail’s scanning ever did.

“Yahoo mined users’ emails in part to discover products they bought through receipts from e-commerce companies such as Amazon.com,” said the WSJ. “In 2015, Amazon stopped including full itemized receipts in the emails it sends customers, partly because the company didn’t want Yahoo and others gathering that data for their own use.”

Although some content is excluded from the scanning — such as health and medical information — it remains to be seen how (or even if) Oath can exclude other kinds of sensitive data from its customers’ inboxes, like bank transfers and stock receipts.

Yahoo Mail’s privacy policy says email accounts are subject to “manual review,” which allows certain Oath employees access to inboxes.

TechCrunch asked Oath and its parent Verizon about what assurances they could provide that confidential emails and information won’t be collected or used in any way. We also asked how consent was obtained from users in Europe, where data protection rules under the newly implemented GDPR regulations are stricter.

Neither Verizon or Oath responded by our deadline.

It should go without saying that email isn’t the most sensitive or secure communications medium, and inboxes should never be assumed to be private — not least from law enforcement and the companies themselves.

Deleting your account might be overkill, especially if you don’t want anyone to hijack your email address once it’s recycled. But if there’s ever been a time to find a better inbox, now might be it.


Source: The Tech Crunch

Read More

Canadian hacker pleads guilty in huge Yahoo hack case

Posted by on Nov 29, 2017 in Hack, russia, Security, TC, Yahoo | 0 comments

 A Canadian citizen has pleaded guilty to aiding Russian intelligence officers in a 2014 hack of Yahoo that exposed as many as 500 million accounts. The defendant, 22-year-old Karim Baratov, is the only arrest to come out of the Yahoo hack as the three other individuals facing charges live in Russia, which obviously has no interest in extraditing them to the United States. Read More
Source: The Tech Crunch

Read More