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Better.com workers leaving in ‘droves’ in wake of CEO Vishal Garg’s return – TechCrunch

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Welcome to my new weekly fintech-focused column. It’s an incredible time to be a financial technology journalist. Besides the fact that over 20% of all venture dollars last year went into fintech startups, I am particularly excited about the many ways that this technology is helping boost inclusion all over the world. While this pandemic has sucked on 100 different levels, one good thing to have come out of it is that consumers and businesses have forced more fintech to exist, and that’s a good thing. 

I’ll be publishing this every Sunday, so in between posts, be sure to listen to the Equity podcast and hear Alex Wilhelm, Natasha Mascarenhas and I riff on all things startups!

There has been plenty of drama at online mortgage lender Better.com over the last couple of months and it appears that just because its infamous CEO Vishal Garg is back at the helm, there is still no shortage of controversy surrounding the company. Earlier this week, Axios’ Dan Primack revealed that investor SoftBank, “in its apparent zeal to back the company,” promised to give Garg the 1.9% voting rights tied to its original investment, “contingent on the final settlement of certain legal proceedings (which has not yet occurred).” For those who haven’t been following this saga, Garg has received a ton of negative press for his unfeeling way of laying off 900 people over Zoom, berating his own investors over email and accusing employees of being “lazy” and “dumb dolphins.” 

We’ve all been wondering how this man can still be running the show and perhaps SoftBank’s conditions help explain it. Meanwhile, one former staffer tells me that Better employees are so upset that Garg is back, that they are leaving the company in droves. Reportedly, employees at every level – from loan officers to senior executives (some of whom are believed to be leaving potentially millions of dollars in equity on the table). As the employee told me, “It’s an astonishing fall from grace. It would not be a stretch to say that the top talent and hundreds from every department have fled in the wake of Zoomgate.”

Image Credits: Better.com CEO Vishal Garg / LinkedIn

But that’s not all. Now that Garg is back, he is apparently paranoid about things being leaked to the media and according to one employee, he and the rest of the execs still there “have put everything on lockdown.”

For example, engineering managers were said to have had an AMA (Ask Me Anything) with Garg and only in-person workers were allowed to attend. Those employees had to sign NDAs and place phones in paper bags, and there were even metal detectors to make sure no one had recording devices. Also, the company has reportedly disabled sharing of Google documents internally and they’ve blocked access to all companywide dashboards – likely because business has probably suffered dramatically. As the employee put it: “There’s no transparency into anything. Vishal doesn’t trust anyone.”

Now let’s talk about payments

Small businesses might soon be able to accept payments using their iPhones without the need for extra hardware, according to this piece, which cites Bloomberg. This is interesting because if true, Apple could be viewed as taking on Square in the contactless payments space. I found all this particularly intriguing because in October, I wrote about a startup named MagicCube – which is backed by the likes of Visa – that is building technology that will impact Android users.

Image Credits: MagicCube

That company’s software-based tech gives merchants a way to accept card payments on any consumer device with no reader or extra hardware required. CEO and co-founder Sam Shawki told me in October that he believed his startup “will be the dominant party on the Android side, which is 85% of the universe.”

Last week, Shawki told me he has an even greater vision when it comes to contactless payments:

Apple’s entry into the payments’ acceptance market will ignite the space for sure. But there is an even better vision of softPOS acceptance that goes beyond Apple’s: one that is built on an open platform, where all devices and all card networks are welcome, payment data is truly secured to the highest standards, and platforms are easily scalable. A broad ecosystem of technology pioneers, payments networks, issuers, and acquirers are developing a softPOS solution that extends beyond any company’s walled garden.

In this vision, merchants own their own data. On any device and operating system, softPOS is easy to implement, and requires no certifications. Expensive, dedicated devices become obsolete.. As these technologies proliferate in everyday life, we’ll witness the advent of the Internet of Payments…Together, sooner than you might think, the newcomers will unseat the incumbents. The meteor is about to hit. And we’ll all be better off for it.

The fact that more companies are making it easier to pay without contact is not surprising and welcome as that spells security and convenience for users. It will be exciting to watch how this all plays out.

Notable rounds and a new fund

Our Nigeria-based startups reporter, Tage Kene-Okafore last week wrote about Esusu, a New York-based fintech company that targets immigrant and minority groups and provides rent reporting and data solutions for credit building, that raised $130 million in a Series B round led by SoftBank Vision Fund 2. The investment gave four-year-old Esusu a valuation of $1 billion, making it one of the very few black-owned unicorns in the U.S. and globally (love to see this list growing!). Esusu co-founders and co-CEOs Nigerian-born American Abbey Wemimo and Indian American Samir Goel come from immigrant homes and say they experienced firsthand financial exclusion. That led them to start Esusu in 2018 in an effort to build the credit scores of immigrants and African-Americans and “leverage data to bridge the racial wealth gap” via rental payments.

Esusu

Tage also covered NALA, a Tanzanian cross-border payments company that recently pivoted from local to international money transfers, and its recent $10 million seed raise. The startup’s mission is to build the “Revolut for Africa.” You can read all about it here.

Besides Esusu, last week saw yet another fintech unicorn being born. CaptivateIQ, which claims to automate commission workflows using AI, raised its third round in 20 months. Less than 10 months after raising its $46 million Series B, CaptivateIQ raised $100 million in a Series C round at a $1.25 billion valuation. The San Francisco-based startup, which has developed a no-code SaaS platform to help companies design customized sales commission plans, says it “more than tripled” its revenue compared to the year prior, although it declined to provide hard revenue figures. A trio of firms co-led CaptivateIQ’s latest investment, including ICONIQ Growth and existing backers Sequoia and Accel.

In M&A activity, investment banking firm UBS picked up financial robot-advisor Wealthfront for $1.4 billion in an all-cash deal. Alex unpacked the deal for us here.

Unsurprisingly, Latin America continues to be a hotbed of fintech activity. I covered Brazilian lender Creditas’s $260 million Series F funding that valued the company at $4.8 billion. That’s up from the fintech’s $1.75 billion valuation at the time of its $255 million raise in December 2020. Fidelity Management led the latest round. One of the most interesting things about this company, besides all the cool services it provides (including offering Latin Americans a way to borrow money at a MUCH lower interest rate than traditional banks offer) is share all its financials! Seriously, the extent at which this company shares the details of its finances is something to be admired and we wish all startups would follow suit.

Image Credits: Creditas

Impressively, in the third quarter of 2021, Creditas says it notched US$46.8 million in revenue – up 233% from $14 million in the 2020 third quarter. It has been focused on growth, so it is still reporting a loss. But founder and CEO Sergio Furio told me that he projects annualized revenue of about $200 million for 2021. Not bad at all! I’m excited to watch this one keep growing.

I also covered a new fintech fund started by a true fintech influencer and all-around nice person, Nik Milanović. For over two years, Nik has been putting out a newsletter called This Week In Fintech, working at Google Pay and angel investing. Most importantly, he’s been building a true community of fintech enthusiasts all around the world. Now he’s putting his money where his mouth is and launching his own venture fund, called simply The Fintech Fund. Nik is trying to raise $10 million for his fund, which has a bunch of cool LPs including investors who put money in fintech startups through other vehicles (such as Bain Capital, Better Tomorrow Ventures and Cowboy Ventures’ Jillian Williams) and a several founders including NerdWallet co-founder Jake Gibson and The Block’s Mike Dudas. Also, I love the fact that the fund  has an explicit target of over 25% or more of its dollars and total number of investments going to founders from underrepresented backgrounds. I mentioned inclusion up top and it’s worth noting that Nik is big on it too. GO NIK!

Image Credits: Founder Nik Milanovic / The Fintech Fund

That’s it for now. I hope you had as much fun reading this as I did writing it. Now, go enjoy what’s left of this weekend!



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The FTC files suit to block Microsoft’s Activision Blizzard acquisition

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The Federal Trade Commission is suing to block the proposed acquisition of Activision Blizzard by Microsoft. It contends that the acquisition, if completed, would give Microsoft an unfair advantage over its competitors.

This morning, the four-person commission voted to issue the lawsuit. The three Democrat members (chair Lina Khan, Rebecca Slaughter and Alvaro Bedoya) voted in favor and the Republican (Christine Wilson) voted against. The commission allegedly met with Microsoft the day prior to discuss concessions, according to a report from The Washington Post.

If its news release is anything to go by, the commissioners weren’t convinced that Microsoft wouldn’t withhold Activision Blizzard’s popular games from competing services. The FTC cited Microsoft’s acquisition of Zenimax, and how games such as Starfield and Redfall became exclusive following its close.

Holly Vedova, director of the FTC’s Bureau of Competition, said in a statement, “Microsoft has already shown that it can and will withhold content from its gaming rivals. Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”

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The FTC is not the only government body to express concern about the implications of the acquisition. The UK’s Competition and Markets Authority is currently investigating. It recently closed Phase One of the investigation, and expressed concerns in its issues statement.

The history of the planned acquisition

Microsoft announced its intention to acquire the publisher in January. Through this acquisition, it would become the regent of popular gaming franchises such as Call of Duty, Candy Crush, World of Warcraft and many others. Reportedly, it offered around $69 billion for Activision Blizzard.

The concerns about the scale of the acquisition emerged almost as soon as it was announced. The FTC reportedly moved to investigate the deal almost immediately. Niko Partners senior analyst Daniel Ahmad said at the time that Microsoft would have to pay Activision $3 billion if the deal was blocked.

The current focal point of the antitrust concerns is the Call of Duty franchise. Sony has repeatedly contended, in public statements primarily aimed at the CMA’s investigation, that Microsoft could undermine its competition via these popular and lucrative games. It could, according to Sony, either outright stop publishing them on Sony’s platforms, or it could offer them on its Xbox Game Pass subscription service. Sony claims Call of Duty on Game Pass would diminish demand for Sony consoles even if Call of Duty is still published on them.

Microsoft has, in turn, responded that its competitors have plenty of exclusive titles of their own. It’s also offered to sign 10-year deals with Sony, Nintendo and Valve (the company behind PC games store Steam) to offer Call of Duty titles on their platforms. It announced earlier this week that it has inked such a deal with Nintendo.

Brad Smith, Microsoft’s vice chair and president, said in a statement to The Verge, “We continue to believe that this deal will expand competition and create more opportunities for gamers and game developers. We have been committed since Day One to addressing competition concerns, including by offering earlier this week proposed concessions to the FTC. While we believed in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present our case in court.”



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Airtable chief revenue officer, chief people officer and chief product officer are out • TechCrunch

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As part of Airtable’s decision to cut 20% of staff, or 254 employees, three executives are “parting ways” with the company as well, a spokesperson confirmed over email. The chief revenue officer, chief people officer and chief product officer are no longer with the company.

Airtable’s chief revenue officer, Seth Shaw, joined in November 2020 just one month before Airtable’s chief producer officer Peter Deng came on board. Airtable’s chief people officer, Johanna Jackman, joined Airtable in May 2021 with an ambitious goal to double the company’s headcount to 1,000 in 12 months. The three executives are departing today as a mutual decision with Airtable, but will advise the company through the next phase of transition, the company says. All three executives were reached out to for further comment and this story will be updated with their responses if given.

An Airtable spokesperson declined to comment on if the executives were offered severance pay. The positions will be succeeded by internal employees, introduced at an all-hands meeting to be held this Friday.

Executive departures at this scale are rare, even if the overall company is going through a heavy round of cuts. But CEO and founder Howie Liu emphasized, in an email sent to staff but seen by TechCrunch, that the decision – Airtable’s first-ever lay off in its decade-long history – was made following Airtable’s choice to pivot to a more “narrowly focused mode of execution.”

In the email, Liu described Airtable’s goal – first unveiled in October – to capture enterprise clients with connected apps. Now, instead of the bottom-up adoption that first fueled Airtable’s rise, the company wants to be more focused in this new direction. Liu’s e-mail indicates that the startup will devote a majority of its resources toward “landing and expanding large enterprise companies with at least 1k FTEs – where our connected apps vision will deliver the most differentiated value.”

The lean mindset comes after Airtable reduced spend in marketing media, real estate, business technology and infrastructure, the e-mail indicates. “In trying to do too many things at once, we have grown our organization at a breakneck pace over the past few years. We will continue to emphasize growth, but do so by investing heavily in the levers that yield the highest growth relative to their cost,” Liu wrote.

Airtable seems to be emphasizing that its reduced spend doesn’t come with less ambition, or ability to execute. A spokesperson added over e-mail that all of Airtable’s funds from its $735 million Series F are “still intact.” They also said that the startup’s enterprise side, which makes up the majority of Airtable’s revenue, is growing more than 100% year over year; the product move today just doubles down on that exact cohort.

Current and former Airtable employees can reach out to Natasha Mascarenhas on Signal, a secure encrypted messaging app, at 925 271 0912. You can also DM her on Twitter, @nmasc_. 



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Kubernetes Gateway API reality check: Ingress controller is still needed

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No doubt the new Kubernetes excitement is the Gateway API. One of the more significant changes in the Kubernetes project, the Gateway API is sorely needed. More granular and robust control over Kubernetes service networking better addresses the growing number of use cases and roles within the cloud-native paradigm.

Shared architecture — at all scales — requires flexible, scalable and extensible means to manage, observe and secure that infrastructure. The Gateway API is designed for those tasks. Once fully matured, it will help developers, SREs, platform teams, architects and CTOs by making Kubernetes infrastructure tooling and governance more modular and less bespoke.

But let’s be sure the hype does not get ahead of today’s needs.

The past and future Kubernetes gateway API

There remains a gap between present and future states of Ingress control in Kubernetes. This has led to a common misconception that the Gateway API will replace the Kubernetes Ingress Controller (KIC) in the near term or make it less useful over the longer term. This view is incorrect for multiple reasons.

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Ingress controllers are now embedded in the functional architecture of most Kubernetes deployments. They have become de facto. At some point, the Gateway API will be sufficiently mature to replace all functionality of the Ingress API and even the implementation-specific annotations and custom resources that many of the Ingress implementations use, but that day remains far off.

Today, most IT organizations are still either in the early adoption or the testing stage with Kubernetes. For many, just getting comfortable with the new architecture, networking constructs, and application and service management requirements requires considerable internal education and digestion.

Gateway API and Ingress controllers are not mutually exclusive

As we’ve done at NGINX, other Ingress maintainers will presumably implement the Gateway API in their products to take advantage of the new functionality and stay current with the Kubernetes API and project. Just as RESTful APIs are useful for many tasks, the Kubernetes API underpins many products and services, all built on the foundation of its powerful container orchestration engine.

The Gateway API is designed to be a universal component layer for managing service connectivity and behaviors within Kubernetes. It is expressive and extensible, making it useful for many roles, from DevOps to security to NetOps.

As a team that has invested considerable resources into an open source Ingress controller, NGINX could have chosen to integrate the Gateway API into our existing work. Instead, we elected to leverage the Gateway API as a standalone, more open-ended project. We chose this path so as not to project the existing constraints of our Ingress controller implementation onto ways we might hope to use the Gateway API or NGINX in the future. With fewer constraints, it is easier to fail faster or to explore new designs and concepts. Like most cloud-native technology, the Gateway API construct is designed for loose coupling and modularity ­— even more so than the Ingress controller, in fact.

We are also hopeful that some of our new work around the Gateway API is taken back into the open-source community. We have been present in the Kubernetes community for quite some time and are increasing our open-source efforts around the Gateway API.

It could be interpreted that the evolving API provides an invaluable insertion point and opportunity for a “do-over” on service networking. But that does not mean that everyone is quick to toss out years of investment in other projects. Ingress will continue to be important as Gateway API matures and develops, and the two are not mutually exclusive.

Plan for a hybrid future

Does it sound like we think the Kubernetes world should have its Gateway API cake and eat its Ingress controller too? Well, we do. Guilty as charged. Bottom line: We believe Kubernetes is a big tent with plenty of room for both new constructs and older categories. Improving on existing Ingress controllers —which were tethered to a limited annotation capability that induced complexity and reduced modularity — remains critical for organizations for the foreseeable future.

Yes, the Gateway API will help us improve Ingress controllers and unleash innovation, but it’s an API, not a product category. This new API is not a magic wand nor a silver bullet. Smart teams are planning for this hybrid future, learning about the improvements the Gateway API will bring while continuing to plan around ongoing Ingress controller improvement. The beauty of this hybrid reality is that everyone can run clusters in the way they know and desire. Every team gets what they want and need.

Brian Ehlert is director of product management at NGINX.

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