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Meet the 13 power players of fintech unicorn Brex as it tries to unseat traditional banks and credit card companies in 2020

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credit card brex 2x1

  • Brex, a fintech unicorn, is one of the most interesting companies in Silicon Valley.
  • We identified the 13 employees that Brex assembled to help the financial-services startup take on traditional financial institutions in 2020.
  • The power players include employees who helped launch its bank-account product, Brex Cash, and people working with existing customers and recruiting new ones for the flagship corporate-credit-card product.
  • Click here to read more BI Prime stories.

Brex, simply put, is a startup for startups.

A venture-backed company can have millions in the bank and not get approved for a credit card. That's because the traditional financial institutions want to see a credit history, which few new companies have, before issuing that precious piece of plastic. Brex solved for the problem by giving corporate credit cards to startups based on their available cash balance — including money raised through venture funding — and using data to predict a startup's future ability to pay.

In the past year, Brex grew beyond its roots as a "black card for startups" to include a bank-account product that gives customers the ability to send payments, new credit cards with rewards tailored for e-commerce and healthcare businesses, a members-only lounge, and a restaurant.

Each new product brings Brex closer to the financial-services leaders it wants to unseat. Henrique Dubugras, the company's 24-year-old cofounder and chief executive, told Business Insider that in the long run, the goal is not to become a bank — but to create a collection of products for saving and spending money, in the same way that Apple owns computing through its product suite.

With a private-market valuation of $2.6 billion, Brex has plans to double its staff to 800 employees this year, adding to a powerhouse team of financial-services veterans and tech-giant alumni.

This list of top employees is focused on staff who are helping the company take on legacy finance institutions, as opposed to the technical talent at the startup. They include the people tasked with raising funding, rolling out new products, keeping customers happy, and signing on rewards partners, as well as the people responsible for plastering San Francisco with Brex advertisements.  

Meet the 13 power players of Brex:

SEE ALSO: Brex, the $2.6 billion credit card company for startups, explains why it's getting closer to traditional finance with its new Brex Cash bank account product

DON'T MISS: Brex raised $57 million from Peter Thiel and Y Combinator using these 19 slides

Michael Tannenbaum, chief financial officer

Michael Tannenbaum was the architect of Brex's flagship product, which allows startups to get approved for corporate credit cards based on their available cash balance — including venture capital — rather than credit history. The company uses data to forecast cash balances and determine the startup's future ability to pay, the idea being that it could cut off customers before they go into credit-card debt.

A former investment-banking analyst, Tannenbaum started working at Brex when the company was just an idea staged in the cofounder's kitchen. He was hired to develop its credit-card model and to build credibility with financial partners, including banks and lenders.

As chief financial officer, he oversees finance, operations, capital markets, corporate development, and credit.



Larissa Rocha, chief community officer

As employee No. 1 at Brex, Rocha has held a variety of roles, but she has always maintained the "doer" mindset that Brex cofounders Dubugras and Pedro Franceschi gave her in her first position.

Rocha joined the startup two weeks after her graduation from Harvard University. Over the years, she built a customer-support team, helped land the company's first customers, and oversaw its foray into restaurants and community spaces. She even ran strategy for recruiting engineers.

"When Henrique explained the new role for me, that was my first time hearing a lot of those developer terms," Rocha said.

Now Rocha is chief community officer and creates programming for Brex's customers. She said that since Brex is itself a startup, she's been able to help other Brex members navigate similarly difficult and less-than-well-defined issues she has successfully overcome.

 



Katie Biber, Chief Legal Officer

Katie Biber joined Brex in July to lead its legal and compliance teams as the startup was launching an FDIC-insured bank account product for its customers.  The former legal executive oversaw compliance initiatives at major tech startups like AirbnbThumbtack, and crypto startup Anchorage following years of work as a political lawyer.

"I committed to giving the tech industry a 2-year effort and it stuck," Biber told Business Insider in July.

Like Dubugras, Biber sees opportunity for Brex and other startups in highly regulated industries like finance, to build trust with customers by working within those traditional bounds instead of breaking them down.

"The market opportunity for Brex is really immense because it has defined a category and now others are rushing to fill it," Biber said. "It reminds me of a campaign that just hits it spot on. You can have the slickest ads, but if your candidate doesn't strike a chord with voters you are staring down empty stadiums. I see that all coming together at Brex."



Marco Mahrus, vice president of payments

Marco Mahrus was working to develop underwriting improvements at Uber when a friend introduced him to the Brex team. The Harvard MBA grad had spent years working in finance at big tech companies and smaller startups and wasn't ready yet to make the switch. By 2019 that changed, and Mahrus was ready to jump on Brex's rocketship.

As head of payments, Mahrus is responsible for building the underlying infrastructure that keeps Brex running. He has spearheaded efforts to integrate Apple Pay and Google Pay in addition to managing all profits and losses on the corporate-cards side of the business. 

"Brex is known for corporate-card payments and now a cash-management account, but under the hood is a core banking platform developed from the ground up to address startup and SMB financial services," Mahrus said.



Thomas Piani, product director for Brex Cash

Choosing a credit card often comes down to which has the most useful rewards. Thomas Piani was hired in 2018 to design the company's rewards program to go head-to-head with those of competitors like American Express or Chase Bank. 

He landed the startup's first airline partnership, which let Brex customers spend their rewards on miles, and led the initiative around its first cobranded credit card with Bank of the West.

Today, Piani oversees the company's second product, a no-fee credit card for e-commerce companies. His team rolled out a suite of rewards tailored to those businesses, such as discounts on shipping and advertising through partnerships.



Roni Saporta, director of capital markets

Because Brex's core business is extending credit to customers, it relies on raising debt from big institutions on Wall Street, regional banks, and asset managers to finance those credit-card transactions.

Roni Saporta helped the company close two massive fundraising events last year: a $100 million round of debt financing from Barclays in June and a second round from Credit Suisse that totaled $200 million. As a director of capital markets, she's tasked with building relationships with investors and negotiating deal terms.

Before Brex, Saporta was an associate at Credit Suisse in New York.



Mira Srinivasan, head of credit

Taking on entrenched financial-services companies like American Express is a daunting undertaking, to say the least. But Brex has a secret weapon: Mira Srinivasan, a former vice president of American Express.

Srinivasan joined Brex in 2019 to build the kind of credit policies and procedures that the startup is banking on to unseat her former employer. She takes a veteran's approach to risk monitoring and assessment by instituting old procedures, like collections, with a startup slant. By using data that other institutions don't have, Srinivasan's team is able to more accurately predict and manage risk to the benefit of Brex and its customers, she said.

"Most traditional finance institutions do not have this flexibility, as they are bound by legacy infrastructure," Srinivasan said.

Before Brex, she led risk management at American Express for 12 years. She was previously a research analyst at McKinsey in its corporate-finance division.



Miguel Rios-Berrios, director of engineering and head of data

Miguel Rios-Berrios got his engineering degree from the University of Puerto Rico at Mayaguez before heading to the University of Maryland for his Masters. He never finished the program, and instead landed an internship at Twitter in 2010. There, he learned the ropes of the tech industry and quickly rose the ranks of the engineering organization, eventually becoming the head of data science.

A company spokeswoman said Brex set out on a year-long search for its new head of engineering late last year. The startup was rapidly growing the team as it continued to add new products and services at a break-neck pace, and needed someone to lead the team. Rios-Berrios had the experience Brex was looking for, and he joined the startup in October.

In his role, Rios-Berrios leads the teams responsible for data products, data platforms, risk, and analytics. He is also an active member of Brex's diversity council, according to a company spokeswoman.

 



Erica Dorfman, vice president of treasury and capital markets

Erica Dorfman joined Brex in August 2019 to lead liquidity, cash management, and debt financing for the startup's suite of credit products. With her team, Dorfman has raised $500 million in debt financing for Brex, and most recently helped launch its newest service, an FDIC-insured Brex Cash account for startups.

Dorfman entered the fintech world after several years working in a traditional finance role on Wall Street. She oversaw capital markets initiatives at student loan startup SoFi before leading finance and operations at finance automation startup Tally. 

 



Ritik Malhotra, product director for special projects

Ritik Malhotra joined Brex as part of the acquisition of his company, Elph, which let users manage their cryptocurrency holdings across apps in one place.

His team got to work immediately on Brex Cash, the startup's answer to bank accounts. The product will give customers the ability to store money, earn yields, and send payments in less than a minute, according to the company. It is still being tested and has a waitlist of startups.

Malhotra said he spends a lot of time trying to suss out where traditional finance institutions fall short to help Brex Cash solve for customer frustrations.



Camilla Morais, vice president of operations and financial planning

Camilla Morais, the vice president of finance, runs internal finance for the fast-growing startup. She's responsible for the teams that raise money from capital markets and ensure the unit economics that make investors happy to see. She also manages head count and office planning as the company seeks to double its workforce.

When she joined in 2018, Morais worked on designing the financial models that Brex used for its flagship corporate credit card. Since then, she has also had a hand in overseeing Brex Cash, the startup's bank-account product, and offerings for e-commerce and healthcare startups.

"Speaking with investors is part of my day-by-day at Brex, whether or not we are fundraising," Morais told Business Insider. "It's always important to build a relationship with our current and future investors before the needs come. But there is much more than that."

Before Brex, Morais was a director of marketing and business planning for Kraft Heinz in Chicago.



Kira Klaas, director of brand

On marketing, Brex has to compete with traditional financial institutions — many of which have branch locations and airport lounges — on a fraction of their budgets.

Kira Klaas, who works on the startup's mission and brand messaging, convinces startups to put their trust in the lesser-known entity. Her job is to develop customers who believe so strongly in Brex's story and how it creates value that they try to convince others to sign up. 

Last year, her pièce de résistance was Brex's advertising takeover at TechCrunch Disrupt, a San Francisco conference attended by thousands of tech workers. Dubugras announced its new product Brex Cash onstage, and within minutes, 257 billboards, bus stops, and news-rack advertisements across the city were swapped out to promote the launch.

She said the company passed its goal for sign-ups by 273% at launch, and the waitlist has been growing steadily since.



Arthur Levy, vice president of business development

In early 2019, Arthur Levy was the company's first business-development hire, and since then, he has built a team and strategy around creating partnerships that add value for Brex's customers.

Brex's chief financial officer called Levy the "mastermind" behind the company's new partnership with JetBlue, which allows startups to cash in points for miles. He spent many hours flying to New York to convince the airline to give select customers preferred status and later to allow all customers to transfer rewards.

Levy also oversees high-profile deals and partnerships with Intuit, NetSuite, Amazon Web Services, WeWork, and Zoom. His team drives almost 40% of new revenue every month, the startup said.




A Google product built for users in developing countries is booming in the US. The head of Google's Next Billion Users group explains how its work in emerging markets is shaping the next Google hits. (GOOGL)

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Caesar Sengupta VP, product management for Google's Next Billion Users

  • Now five years old, Google's Next Billion Users initiative has around 300 central employees and works with teams across YouTube, Chrome, and more.
  • NBU builds new products, and adapts existing Google products, for emerging markets. It was an idea Sundar Pichai first floated when he became CEO in 2015.
  • Voice, vernacular, and video are the three big themes it's focusing on today, says product lead Josh Woodward.
  • Some products, like NBU's files app, have gone on to become surprise global hits. There will be more to come.
  • Visit Business Insider's homepage for more stories.

When Sundar Pichai was appointed Google's CEO in 2015, one of his early ideas was an initiative to explore how emerging markets were coming online — and how Google's products might not be suitable for many of those users.

The division was named Next Billion Users (NBU) and set out to build products for countries where perhaps Wi-Fi is less available, mobile data costs are higher, or phones lack the mammoth amounts of storage that they often have in the US.

NBU started out looking at India, Indonesia and Brazil, but has since expanded its scope to include Mexico and Nigeria. Today, the division has around 300 central employees and "hundreds" of other members across teams including YouTube, Play, and Chrome, said Josh Woodward, NBU's director of product management, in an interview with Business Insider.

Projects have included Google Go, a stripped-down search app built for lightweight data use. Some of the products have even gone on to become surprise global hits, such as offline Google Maps directions, and Files Go (now named Files by Google) which was, funnily enough, originally built to seek and destroy unwanted memes.

 "One of the big problems we were seeing was people forwarding WhatsApp memes to each other, that was filling up a lot of storage [on their phones]," said Woodward.

"So, the team in Mountain View connected with the Google Photos team who had built a lot of interesting computer vision stuff and we were able to train that model to detect these memes."

But the app has boomed well outside of its target market. "The US today is the fourth most popular country for the files app, which is interesting because we never designed it for the US," said Woodward.

NBU's work is split between adapting existing Google products in ways that make sense for other markets, and building entirely new products that are more locally relevant. And as time has moved on and smartphone use has increased, says Woodward, the team has focused more on people who are coming online for the very first time.

"If you were to try to boil down the three big trends happening in NBU today, I would say it's voice, vernacular – which is how people who don't usually speak English are coming online in massive quantities – and then video," said Woodward.

The team has offices and conducts field research in the countries where it's focused, so the pandemic has posed an obvious obstacle to much of its work. "Our whole culture we had built around empathy, either building teams in a country or flying people in for two weeks into NBU studios, we've had to shift entirely," said Woodward.

To compensate for not being in the field, the team has been finding other ways of instilling some level of empathy in a Google engineer for a first-time internet user in Mumbai, said Woodward.

For example, there's a mind-boggling internal game called 'Gorm the Zop,' which NBU employees are made to play to try to understand how confusing smartphones and the internet can be for a first-time user. 

"We usually call people up in front of an all-hands meetings and have them play it in front of their peers." said Woodward.

Google internal game screenshot

But the new normal has also changed the way NBU is thinking about the future, especially on the themes of employment and digital payments, said Woodward.

"These both feel like areas where we've almost hit a fast-forward button to 2030 and we're seeing the pace of change in these areas really fast," he said.

"For most workers in a lot of countries where we're doing research with right now, they're printing out CVs and dropping them in wooden boxes to try to get jobs," he added. "That world is going to change and become digital." Video calling replacing face-to-face interviews are a big part of that shift that the pandemic is only accelerating.

Meanwhile, the team sees a lot more opportunities to build on its success in digital payments, particularly in India where Google Pay allows merchants to display digital storefronts in the app where users can even browse and order from menus. There's been speculation that Google will bring some of these features to the US, too, where Google Pay has been slower to grow but could be invigorated by a pandemic-driven push toward contactless payments.

Then there's Jio, India's telecom platform giant, into which Google just put a $4.5 billion (7.5%) stake. The two are now working together on a custom version of Android for entry-level phones – a way for Google to get its range of apps and services in the hands of even more people.

"We're still in the early stages of defining the exact specs and products and what not," said Woodward. "[Jio] of course understand India, they have distribution, they have key assets in the country."

Josh Woodward, director of product management, NBU

NBU has had its failures along the way, too. In February, it shuttered Google Stations, a program which put free Wi-Fi in more than 400 railway stations in India and other parts of the world. It was a project that made much more sense in late 2014, and less so when India's Jio network arrived and data costs plummeted.

Then in May, Neighborly, an app launched in Mumbai for residents to connect with locals, was shuttered after it failed to gain traction.

"If people tended to have an important local question, they might ask it on Neighborly but they had that really important question maybe once a month.... so the frequency of use just wasn't there," said Woodward.

With Alphabet focusing on bringing the internet to other parts of the world via fiber networks or internet balloons, there also may be more opportunities for these teams to work with NBU. Woodward says NBU is less focused on the infrastructure side right now, but said the team worked with Alphabet's Loon for its rollout of internet service in Kenya.

Woodward says the "beating heart" of NBU right now is how Google learns from users who are mobile-only, but the finding could affect Google's broader, global product strategy ahead.

"We used to say in 2015 the future of the internet looks like the next billion users, which was kind of a rallying cry to come and join our team. But actually I would say that future is the present now. These are the users who are determining a lot of the trends we're going to see play out in the US and the rest of the world."

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Uber and Lyft threaten to temporarily shut down in California over labor disputes (UBER)

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  • Both Uber and Lyft said they could temporarily shut down in California if forced to consider their drivers employees.
  • On Monday, a court ruled in favor of labor activists in ordering Uber and other gig-work firms to pay workers as employees, not contractors. The companies requested a 10-day stay on the ruling.
  • A group of companies that rely on independent contractors has proposed a third way of classifying workers, which includes a benefits pool that can follow workers across apps and platforms while maintaining flexibility. 
  • Visit Business Insider's homepage for more stories.

Uber and Lyft could temporarily shut down in California if a court ruling saying their workers must be classified as employees, not contractors, holds.

Uber CEO Dara Khosrowshahi told MSNBC Wednesday morning that "it's hard to believe we'll be able to switch our model to full-time employment quickly" after a state judge ruled Monday that Uber, Lyft, and other gig-work companies must reclassify drivers and couriers as employees.

Lyft made its threat on a conference call Wednesday afternoon, based on the same ruling. Executives said the shutdown could occur as soon as August 20. The state makes up about 16% of Lyft's total rides, the company said. 

Uber's Khosrowshahi said the shutdown could last until the company's stay on the court ruling, which it requested in filings Tuesday night, is granted. Otherwise, it could continue until California voters decide on Proposition 22 in November, which would allow the company to classify drivers as contractors.

The reclassification as employees would give workers access to benefits and other perks of full-time employment that activist groups have been fighting for over the years. It would also create massive overhead expenses for the companies, whose business models largely rely on independent contractors and lower labor costs.

In fighting the new rules, which were made law by California legislators last year, Uber and others have said workers will lose the flexibility many love about working on the platforms. Instead, a consortium of firms has proposed a third way of classifying employees and wants to pay into a floating benefits fund that will follow workers across ride-hailing and delivery platforms to pay for healthcare and other expenses.

Uber previously accused labor groups of being driven by politics in their fight for driver rights.

"We've got terrific supporters [of Proposition 22] in the community as well who actually care about drivers, versus labor unions and politics. They actually are taking into account the wants and needs of drivers," Khosrowshahi told investors last week.

Advocacy groups say the pandemic makes clear the need for driver healthcare benefits. Monday's ruling "means Uber and Lyft must put an end to their lawless actions that deny benefits and protections to drivers who urgently need them," Uber driver Mekela Edwards, a member of driver advocacy group We Drive Progress, told Business Insider at the time.

A complete shutdown in California would be the first time Uber exited a US market over legal disputes but not the first time it's adapted to changing regulatory environments. Since 2019, the company has not allowed new drivers in New York to sign up on the app, citing new rules about minimum pay in the city.

California's attorney general likely won't be sad to see Uber leave, if it makes good on its threat.

"Any business model that relies on short-changing workers in order to make it probably shouldn't be anywhere, whether California or otherwise," California Attorney General Xavier Becerra told CNBC earlier this week.

Uber and Lyft have about a week to appeal, CNBC reported. If that doesn't work out, voters will decide on the consortium's proposal, which has more than $90 million in supportive funding from the companies, in November.

When he was pressed on if his threat was serious, Khosrowshahi said "hopefully, the courts will reconsider. By no means do we want this to happen."

This post has been updated to reflect Lyft's similar threat, Uber's requested stay on the ruling Tuesday night, and to clarify that the shutdown would only occur if the 10-day stay was not granted. 

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Lyft reports a 61% revenue slowdown as the coronavirus hobbles ride-hailing, but still manages to beat Wall Street expectations (LYFT)

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FILE PHOTO: A Lyft driver wears a mask during the coronavirus outbreak, as he leaves passengers in the U.S. Capitol Hill neighborhood in Washington, U.S. April 1, 2020.  REUTERS/Jonathan Ernst/File Photo

Lyft on Wednesday revealed its lowest quarterly revenue since 2017, as the coronavirus pandemic wallops its business.

Here are the key numbers from the earnings report, covering April 1 through June 31:

  • Revenue: $339.3 million ($334 million expected)
  • EPS: $-0.86 ($-0.99 expected)
  • Net loss: $437 million 

"While rideshare rides in the quarter were down significantly year-over-year, we are encouraged by the recovery trends we are beginning to see, with monthly rideshare rides in July up 78% compared to April," CEO Logan Green said in a press release. "Lyft's second quarter results reflect an operating environment that was not only challenging for our core ridesharing business, but also for our valued riders and drivers and the communities we serve."

Despite the rebound from April lows, active riders declined by 60% from the same period in 2019 thanks to shelter-in-place orders and a near shutdown in business travel. The gains outpaced the rate at which Lyft could get drivers back on the platform, executives said. 

Unlike Uber, Lyft had no food-delivery business to lean on as the coronavirus pandemic hobbled rides requests. Moreover, Lyft only operates in North America, so the United States' failure to contain the spread of the virus has exacerbated its financial difficulties.

Shares of Lyft initially jumped as much as 4% in after-hours trading following the announcement, before sinking about 2% below Wednesday's close. The company's EBITDA loss was 20% better than it had forecast earlier this year, CFO Brian Robert said, but the bottom line beat was largely fueled by massive layoffs that helped to cut costs. 

"These steps position the Company to achieve adjusted EBITDA profitability with 20 - 25% fewer rides than originally contemplated in our fourth quarter 2021 target," Roberts said. 

On a conference call, executives said Lyft would also possibly shut down temporarily in California amid a long-running dispute with labor advocates over its classification of drivers as contractors instead of employees. The state makes up about 16% of total rides, Lyft said. 

The companies, along with other gig-economy startups, hope to fund a shared benefits pool that can follow workers between apps while allowing them the same flexibility. 

"Lyft cannot comply with the injunction at the flip of a switch," Green said. 

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One of the first successful Russian-backed misinformation efforts of the 2020 election tricked Donald Trump Jr. and Ted Cruz into helping spread false claims about Portland protesters (TWTR)

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  • Prominent conservatives including Donald Trump Jr. and Sen. Ted Cruz retweeted misleading claims and footage attempting to depict Portland protesters as having burned a "stack of Bibles."
  • But the narrative was originally set in motion by Russian-backed media outlet Ruptly, The New York Times reported Tuesday.
  • After Ruptly aired misleadingly edited footage of the protesters, a right-wing commentator tweeted the footage along with claims further mischaracterizing them, which several conservative politicians and news outlets then amplified.
  • The incident reveals Russia's evolving and increasingly nuanced misinformation tactics, which now rely on real people spreading stories with elements of truth, not just fake news.
  • Visit Business Insider's homepage for more stories.

Several high-profile conservatives including Donald Trump Jr. and Sen. Ted Cruz of Texas shared Russian misinformation, the The New York Times reported Tuesday.

In Portland, Oregon, protests against police brutality have continued for more than 70 consecutive days. The protesters themselves have been largely peaceful, but have also on some occasions lit bonfires

In one of those instances, footage from Ruptly, the video arm of Russian state-backed media outlet Russia Today, showed some protesters using a Bible and American flag to start a fire, which others eventually put out, according to The New York Times.

Multiple local media outlets reported that the protests had been peaceful throughout the day and that the fire was started only at the end of the night as a dwindling crowd of somewhere between a few dozen and 100 people spoke about the Black Lives Matter movement, while only one mentioned a Bible being involved at all.

But Ruptly, which has livestreamed the protests and published highlight clips nightly, focused its summary video that night on the burning of what appeared to be a single Bible, The New York Times reported. Twice, it tweeted the video, noting the Bible being set ablaze both times.

A Twitter user with just a few followers also tweeted the video shortly before deleting their account, but not before  right-wing agitator Ian Miles Cheong retweeted them, adding his own false claim that the protesters burned "a stack of Bibles." 

Cheong's tweet then went viral, sparking coverage from prominent and conservative media outlets and blogs including the New York Post, The Federalist, Gateway Pundit, and The Blaze, as well as retweets from Trump Jr. and Sen. Cruz.

The success of Ruptly's misleading coverage of the Portland protests reveals how Russia's misinformation tactics have evolved since the 2016 presidential election, where American intelligence agencies have repeatedly concluded that Russia interfered with the aim of hurting Hillary Clinton's candidacy.

In 2016, Russia relied heavily on fake Facebook, Instagram, Twitter, YouTube, and other social media accounts to artificially amplify fake news stories created by the Internet Research Agency, its in-house troll farm.

But Russia is deploying new, more sophisticated tactics this time around, and the Portland protest story shows how it has learned to leverage hot-button issues that are likely to resonate with highly partisan or ideological groups in order to sow dissent.

Cybersecurity experts have found that Russia is exploiting the coronavirus pandemic and racial tension in the US, and US intelligence agencies have warned that Russia is attempting to sway the election toward Trump again in 2020, though Trump has repeatedly downplayed the assessments of US intelligence agencies, instead giving deference to fringe agitators who support him.

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The WarnerMedia executives who gained more power with a massive restructure

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Hi! Welcome to the Insider Advertising daily for August 13. I'm Lauren Johnson, a senior advertising reporter at Business Insider. Subscribe here to get this newsletter in your inbox every weekday. Send me feedback or tips at ljohnson@businessinsider.com

Today's news: WarnerMedia's new power players, where Facebook boycott ad dollars went, and Publicis Groupe cuts 2020 raises and promotions.


WarnerMedia CEO Jason Kilar

Meet the 7 WarnerMedia execs who gained power during its massive leadership shakeup and business restructuring

Read the full story here.


Mark Zuckerberg

An agency that handles $1.5 billion in ad spend breaks down where money from the Facebook boycott went

Read the full story here.


Sadoun Cannes.JPG

Memo from Publicis Groupe explains why it froze raises for all 20,000 Sapient employees despite beating its financial forecast

Read the full story here.


More stories we're reading:

Thanks for reading and see you tomorrow! You can reach me in the meantime at ljohnson@businessinsider.com and subscribe to this daily email here.

— Lauren

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This YC-backed power couple launched a Patreon alternative for creators that's helped a horror movie actor boost his earnings by 30% during lockdown

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jason annie sean jemi

  • Power couple Annie Hwang and Jason Cui built Jemi, a Patreon alternative that landed them a coveted spot in Y Combinator's Summer 2020 batch.
  • Jemi helps creator entrepreneurs to sell merchandise and experiences, such as autographed pictures, 1-on-1 virtual hang outs, and acting classes.
  • So far, they've brought on ex-Guns N' Roses lead guitarist Bumblefoot, Olympic figure skater Karen Chen, and actor Sean Whalen, who is best known for his roles in the horror film 'The People Under the Stairs' and the 1996 thriller 'Twister'.
  • Business Insider spoke with Whalen about why he chose Jemi over alternatives like Patreon. 
  • Visit Business Insider's homepage for more stories.

Annie Hwang and Jason Cui met on the first day of college at Harvard, where they later started dating. After graduating in 2018, they worked as product managers and launched their tech careers.

After the coronavirus pandemic struck, the power couple started brainstorming new ways to get audience members to interact with, and pay, content creators that use live streaming platforms like TikTok. In April, they launched the private beta version of Jemi, a Patreon alternative that landed the couple a coveted spot in Y Combinator's Summer 2020 batch.

"We want to build this next generation of creator entrepreneurs," Hwang told Business Insider in an interview. 

The country's ongoing shelter-in-place orders means that many actors, comedians, and musicians are unemployed and turning to live streaming, she explained.

Creators "deserve to be monetizing their time and individuality," Hwang added, noting that "not all creators are making money."

Jemi allows creator entrepreneurs to offer merchandise and experiences, such as autographed pictures, 1-on-1 virtual hangouts, and acting classes. The startup takes a cut from each transaction, Cui explained, though he didn't reveal specifics. 

When Jemi launched in April, Hwang started reaching out to creators. So far, Jemi has brought on ex-Guns N' Roses lead guitarist Bumblefoot, Olympic figure skater Karen Chen, and actor Sean Whalen, who is best known for his role in the films 'The People Under the Stairs' and 'Twister'. 

"We're not going after the typical celebrities," Hwang said. "They see themselves as content creators."

Whalen, who most recently appeared in the 2020 film 'American Pickle' starring Seth Rogen, told Business Insider in an interview that, before he discovered Jemi, he'd been looking for new ways to make money from his TikTok live streams, where many of his 100,000+ followers tune in weekly.

Whalen said that Jemi has been helping him make extra cash, as "there's no production going on" in the film industry

"I gave Patreon a try," he said, "but my followers weren't into the subscription model."

Die-hard horror fans from the Midwest

Many of his followers, Whalen explained, are die-hard horror fans that come from rural parts of the Midwest.

"They know me as Roach from The People Under the Stairs or from Twister," he said. The actor's name also got a boost from Netflix, which added Twister to the streaming platform at the beginning of June (before removing the film 2 months later).

Sean Whalen

Whalen, who sells merchandise like autographed photos, DVDs, and Blurays, said he also tried including links to his PayPal and Venmo accounts on his TikTok live streams.

But many of his fans would tell him "I don't have Venmo! I don't have PayPal," the actor said, explaining that the payment platforms aren't as popular among fans in rural areas. 

Jemi made the process simple: Followers make one-time purchases by inputting their shipping and credit card information, all in one place.

"Almost everyone has a credit or debit card," the actor said of his fanbase.  

Since switching from Venmo and PayPal to Jemi, Whalen says his sales have increased by more than 30%. On his Friday TikTok live streams, his busiest days, he said that he sells about 40-50 items in 2 hours, and that Jemi makes it easier to manage the influx of requests. 

There have been some hiccups, Whalen admitted, but he also said that the young entrepreneurs who founded the company "are willing to learn, and there's no ego around that."

SEE ALSO: A former Apple TV designer built a livestreaming startup to challenge Twitch, and he's betting the key to winning will be live rap battles

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NOW WATCH: What makes 'Parasite' so shocking is the twist that happens in a 10-minute sequence

Facebook and Snap both reportedly inquired about acquiring TikTok rival Dubsmash

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  • As TikTok's future in the US remains uncertain, short-form video-making apps and formats have emerged as competitors eager to attract some of TikTok's 100 million monthly US users.
  • One such competitor is Dubsmash, a European-born app for creating lip-syncing videos. The app has been around since 2013, but hasn't reached the same levels of success as some of its rivals.
  • The Information reported Wednesday that both Facebook and Snap had "recently" approached Dubsmash about a potential acquisition. The talks went as far as to discuss a pricetag for the app "in the hundreds of millions of dollars," according to the report.
  • Visit Business Insider's homepage for more stories.

Facebook and Snap both recently approached a TikTok-like platform expressing interest to acquire it for "hundreds of millions of dollars," according to The Information.

The app in question is called Dubsmash, a social platform for creating lip-syncing videos that has been around since 2013. Facebook and Snap's interest in a rival video-sharing app comes as TikTok faces off against the Trump administration's threat to ban the app next month.

Dubsmash and other video-sharing platforms have recently seen boosts in downloads and user numbers as TikTok's 100 million monthly users in the US prepare for a future without the viral app. TikTok is currently facing an executive order from Donald Trump that bans "any transactions" as of mid-September with the app and its Chinese parent company, ByteDance. Although it's unlikely a nationwide ban will be implemented, the threat to TikTok has been enough to send users into a panic about where to make videos and find their favorite creators.

The Information reports that although Dubsmash's acquisition talks with Snap and Facebook occurred in "recent weeks," the discussions are no longer active.

A Snap spokesperson told Business Insider in a statement, "We admire the team but aren't in active talks to acquire." Facebook cited company policy of not commenting on "rumor or speculation," but confirmed they're not in "active discussions" with Dubsmash. Dubsmash did not respond to Business Insider's request for comment.

Meanwhile, Facebook and Snap have been working on their own features drawing from TikTok's popular format. Earlier this month, Facebook launched Instagram Reels in the US, while Snap started to roll out a music-overlay feature for videos.

Dubsmash was an early adopter of the audio-based, video-splicing format later made popular by TikTok. As reported by the New York Times, Dubsmash is where some of the internet's most viral dances have originated, before spreading to TikTok and getting picked up by the platform's most popular creators.

However, Dubsmash has not seen the same level of success as TikTok, nor rivals like Triller and Likee. Sensor Tower indicates Dubsmash has been downloaded around 2 million times in the last six months, and had only one-third of TikTok's lifetime installs in January.

Dubsmash was originally founded in Germany, but the app's creators restarted the company from the ground level in 2017, TechCrunch reported. Dubsmash established itself in Brooklyn with a team of around a dozen employees, and has raised $20 million from investors — although it's receieved no funding since last year, according to PitchBook.

SEE ALSO: No, Donald Trump can't 'ban' TikTok

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NOW WATCH: A cleaning expert reveals her 3-step method for cleaning your entire home quickly


Intercom, a $1.3 billion startup backed by Mark Zuckerberg and Jack Dorsey, just hired a CFO who says the company is 'near profitability' as it eyes an IPO

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  • The $1.3 billion conversational support startup Intercom has hired former Sitecore chief financial officer Dan Griggs as its new CFO.
  • Griggs will help lead Intercom towards an IPO, although it's still "a few years out."
  • In May, Intercom laid off 39 employees, or 6% of its workforce, and many of its smaller customers were impacted by the coronavirus pandemic, but Griggs says the company has seen a rebound.
  • Visit Business Insider's homepage for more stories.

The $1.3 billion conversational support startup Intercom is eyeing an IPO and just hired a chief financial officer to help it get there.

Intercom announced the appointment of Dan Griggs in August, though he actually began his role in April after spending nearly six years at customer experience company Sitecore. As chief financial officer of Intercom, he's  preparing the company to go public

"We have no specific timeline — I envision it a few years out," Griggs told Business Insider. "Nothing is set in stone: We're really focused on realistic strategic growth objectives and building a long term sustainable business."

Griggs says the company is "near profitability" this year, but is willing to invest in areas that will help it grow — like sales to mid-market and large enterprise customers — even if it pushes the timeline for profitability back. Ultimately, Griggs expects Intercom to become profitable within the next two years. 

Griggs was drawn by the team and its 'big ambitions' 

Griggs worked at the adtech company Rocket Fuel as vice president of financial planning and analysis, prior to Sitecore, where he was working when he heard about the opportunity through a recruiter. At the time, he wasn't looking for anything new, but Intercom caught his eye. He was further drawn in his first interactions with founder and then-CEO Eoghan McCabe, as well as Karen Peacock, who was COO at the time but became CEO in July.

"[It] really felt like there was an opportunity to make a difference here," Griggs said. "It's a chance to build a really great team and really take the team to the next level and help build out our infrastructure to support the scale we're looking for."

Intercom CEO Karen Peacock

Griggs has already had an eventful year as he's been tasked with navigating Intercom through the coronavirus pandemic. In May, the company laid off 39 employees, representing about 6% of its workforce. Many of its smaller customers scaled back on their contracts as they took a hit during the crisis, Griggs said. 

Read more: Intercom, a $1.3 billion messaging startup backed by Mark Zuckerberg and Jack Dorsey, laid off 39 employees and is relocating 47 roles to Dublin

Still, he says the company is seeing a rebound from the initial market reaction to the pandemic from March to May, and he says he's "optimistic about the business."

"We really have a great story to tell to both customers and to the market about what we're doing and what problems we're solving," Griggs said.

Intercom competes with other customer support companies like Zendesk, but relies on a more conversational approach where humans and chatbots interact with customers. 

As CFO, Griggs plans to invest in scaling the company's R&D, sales, marketing, and business operations, and doesn't expect Intercom to need to raise money again anytime soon. In total, it's raised $240.5 million at a $1.3 billion valuation, via PitchBook. 

"As I think about it, we have plenty of liquidity," Griggs said. "We're not struggling for cash. For me, it's really about finding that balance between profitability and growth. We have really big ambitions and have every right to believe in continued growth to our company."

Do you work at Intercom? Got a tip? Contact this reporter via email at rmchan@businessinsider.com, Signal at 646.376.6106, Telegram at @rosaliechan, or Twitter DM at @rosaliechan17. (PR pitches by email only, please.) Other types of secure messaging available upon request. 

SEE ALSO: The new CEO of Intercom, a $1.3 billion startup backed by Mark Zuckerberg and Jack Dorsey, says she'll lead the company to profitability and an IPO in a 'few years'

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Meet the 11 top executives who lead Alphabet's 'Other Bets,' helping the company go beyond just Google (GOOG, GOOGL)

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  • In 2015, Google's corporate structure was completely reimagined, as the search giant moved under the new parent company of Alphabet. 
  • The company's core business — search, YouTube, and Android — would remain apart of Google, but much of its other efforts, including Nest and Waymo, would be broken out into separate companies, each with their own CEOs.
  • Because the top executives of these companies are not named Larry or Sergey or Sundar, they often fly under the radar — but don't overlook these leaders. 
  • One was a child chess prodigy, who created a smash hit video game by the age of 17. Another is the largest shareholder in Apple. None are women. 
  • Below are the top executives at Alphabet's "Other Bets." 
  • Visit Business Insider's homepage for more stories.

In 2015, Google's corporate structure was completely reimagined, as the search giant moved under the new parent company of Alphabet. 

The company's core business — search, YouTube, and Android — would remain a part of Google, under the watch of CEO Sundar Pichai. The rest would be broken out into separate companies, each with their own CEOs. All would fall under the auspices of the new Alphabet construct, led by Google co-founders Sergey Brin and Larry Page. 

These non-Google companies that make up the Silicon Valley conglomerate are usually referred to as the "Other Bets," which is how they are labeled on Alphabet's financial statements.

But bets don't always work out, and some have proven more successful than others. Over time, some have been either reabsorbed into Google (Chronicle, Nest, Jigsaw) or killed off entirely (Makani).

Though their revenues and losses are lumped together each quarter, Alphabet's "Other Bets" share little else in common, with company's ranging from anti-aging labs to drone delivery services to startup investment funds.

Also, because the top executives of these companies are not named Larry or Sergey or Sundar, these leaders often fly under the radar. But that doesn't mean their backgrounds aren't worth considering. 

One was a child chess prodigy, who created a smash hit video game by the age of 17. Another is the largest individual shareholder in Apple. Notably, none are women. 

Here are the top executives at Alphabet's "Other Bets:"

SEE ALSO: The pitch decks that helped hot startups raise millions

Access CEO Dinesh Jain

What it does: Access is Alphabet's attempt to deliver faster internet everywhere, and comprises two services: Google Fiber and Webpass. Google Fiber— which delivers internet service to consumers directly through fiber-optic cables — is available in 11 US cities today. Webpass— which uses point-to-point wireless technology — is currently available in 7 US cities.

Despite a notable setback last year when the company had to kill its service in Kentucky, it continues to move ahead, recently announcing plans to expand Fiber to Millcreek, Utah.

Meet the CEO: Dinesh Jain, a veteran of the cable and telecommunications industries, was named Access' new CEO in February 2018. He became the third chief exec at the company in just over one year and tasked with defining the focus for a company that laid off hundreds of employees in 2016 and announced that it was halting plans to expand its fiber business. Prior to Access, Jain was the chief operating officer of Time Warner Cable. 



Calico CEO Arthur Levinson

What it does:Calico is Alphabet's research and development company focused on combating aging and age-related diseases. In short, Calico is trying to find new ways to help people to live longer. It's also considered to be the most secretive of the "other bets."

Meet the CEO: In September 2013, Arthur Levinson was named the chief executive at Calico. Before joining the Alphabet's anti-aging endeavor, Levinson served as CEO of the biotech giant Genentech from 1995 to 2009.

Besides leading Calico, Levinson is also the current chairman of Apple, where he's held the position since 2011 when Steve Jobs passed away. Levinson continues to be Apple's largest individual shareholder.



DeepMind CEO Demis Hassabis

What it does: Founded in London in 2010 and acquired by Google in 2014, DeepMind is an artificial intelligence research company perhaps best known for AlphaGo — an artificial intelligence that beat professional players at the ancient board game Go.

The company's mission is to "solve intelligence" by creating learning systems that can answer some of the hardest questions in science. Last year, Google also absorbed the healthcare arm of DeepMind into its Google Health division.

Meet the CEO: Demis Hassabis was a former child chess prodigy, who by 17 co-created the smash hit video game "Theme Park." Earning degrees in computer science and cognitive neuroscience, Hassabis would go on to found his own video game companies, and eventually started DeepMind in 2010. In 2016, The Guardian dubbed Hassabis "the superhero of artificial intelligence."



GV CEO David Krane

What it does:GV (formerly known as Google Ventures) is Alphabet's venture capital arm that was initially focused on funding early-stage startups. By 2015, the fund — which has $4.5 billion under management in total — shifted its strategy to invest in more mature companies.

You might have heard of GV's famous "design sprint," a five-day process for designing, prototyping, and testing new ideas.

Meet the CEO: David Krane started at Google nearly 20 years ago as director of global communications and public affairs. He's been the managing director at GV since 2014 and took over as CEO in 2016 when its founder, Bill Maris, left the firm. Some of Krane's most notable investments at GV include Uber, Nest, and Blue Bottle Coffee. 



CapitalG Founding Partner David Lawee

What it does:CapitalG (formerly known as Google Capital) is Alphabet's growth equity fund, focused on investing in later-stage companies. The original idea for CapitalG was to give young companies access to Google's many experts across different areas, but CapitalG says its funding runs independently of Google. Among its investments you'll find Lyft, Airbnb, Looker, and Cloudflare.

Meet the CEO: David Lawee started at Google in late 2005 as the company's first vice president of marketing. Later, Lawee served as Google's VP of corporate development, where he oversaw around 100 acquisitions, including some of its most important for its ad business: AdMob and DoubleClick. Lawee was the founding partner of CapitalG in 2013. 

 

 



Loon CEO Alastair Westgarth

What it does: Loon is working to bring internet access to unserved and underserved communities around the world by a network of balloons operating in the stratosphere. It celebrated its first large-scale deployment this year, bringing internet service to Kenya.

Meet the CEO: With over 30 years experience in the cellular industry, Alastair Westgarth was named Loon's CEO in 2017 after its previous boss left after just six months on the job.

"It seemed too crazy, even for a company with a reputation for making the outlandish possible," said Westgarth, describing the moment he first heard about the Loon project back when it was still a part of X. "Once a curious skeptic, I now have the great privilege of being the CEO of Loon, and I couldn't be prouder of the progress the team has made," he added.

Prior to Loon, Westgarth was the CEO of a wireless antennae company named Quintel.



Sidewalk Labs CEO Dan Doctoroff

What it does: Sidewalk Labs is Alphabet's urban-innovation arm that hopes to use new technologies to address major urban challenges. Its first approved project was to turn Toronto's waterfront neighborhood, known as Quayside, into a high-tech development, but the project was shuttered in 2020. The company continues to work on projects such as factory-made mass timber construction, but has not revealed plans for any new projects as ambitious as Quayside.

Meet the CEO: Before helping found Sidewalk Labs in 2015, Doctoroff served as Bloomberg LP's CEO from 2011 to 2014. Prior to his work at the news and information giant, Doctoroff was New York City's deputy mayor for economic development and rebuilding under Mayor Michael Bloomberg. During his tenure, Doctoroff oversaw the rebuilding of the World Trade Center and the popular High Line development. 



Verily CEO Andy Conrad

What it does: Verily is Alphabet's life-science arm, with a mission to make the world's health data useful. So far, that's meant the company has taken on an array of projects ranging from diabetes care to creating utensils for those with movement disorders.

With the COVID-19 pandemic, the company also launched a screening and testing service. Verily landed $1 billion in outside funding last year, and it could be one of the first Alphabet companies to go public

Meet the CEO: Before being named Verily's CEO in 2015, Andy Conrad served as the chief scientific officer of LabCorp— one of the world's largest health care diagnostics companies. Conrad also helped cofound the National Genetics Institute, which created one of the first cost-effective tests for screening HIV. 



Waymo CEO John Krafcik

What it does: Waymo is Alphabet's self-driving technology company, which started as the "Google Self-Driving Car Project" back in 2009. This year, Waymo raised a total of $3 billion for its first external funding round. 

Meet the CEO: With John Krafcik at the helm since 2015, Waymo became the first company to complete a ride in a fully self-driving vehicle on public roads. It also launched Waymo One — the first commercial, autonomous ride-hailing service in the US.

Prior to Waymo, Krafcik was president of the car-buying website True Car, and had served as CEO of Hyundai Motor America for nearly a decade. 



Wing CEO James Ryan Burgess

What it does: Wing is Alphabet's drone delivery company. After initial tests in Australia, where it delivered everything from burritos and coffees to over-the-counter medications, Wing became the first drone operator to receive federal clearance in the US to start delivering packages from the sky. It's also seen a boost in demand during the COVID-19 pandemic.

Meet the CEO: James Ryan Burgess joined Wing back in 2012 when it was still a part of Alphabet's moonshot laboratory, X. He served in multiple leadership roles before becoming its chief executive. Prior to Wing, Burgess worked for a handful of energy and robotics startups. Today, in his free time, he's also a pilot and paragliding instructor. 



X's Captain of Moonshots Astro Teller

What it does: X, formerly known as Google X, is Alphabet's factory for moonshots — which is to say, ambitious projects that take years to actualize. A number of Alphabet's "Other Bets" got their start at X, including Waymo, Wing, Loon, and Verily.

Meet the CEO: Eric "Astro" Teller has been Alphabet's Captain of Moonshots since 2010. Prior to that, Teller had founded five companies, the last of which, BodyMedia, was acquired by Jawbone for $100 million. 

"[He thinks] farther ahead in research and business chess than anyone I've ever seen," Teller's friend and former classmate at Stanford, David Andre, once told Chicago Business.

As for why he enjoys taking on the seemingly impossible, Teller said at the South by Southwest talk back in 2013: "When you try to do something radically hard, you approach the problem differently than when you try to make something incrementally better. When you attack a problem as though it were solvable, even though you don't know how to solve it, you will be shocked with what you come up with. It's 100 times more worth it. It's never 100 times harder." 



Lyft's president threatened to shut down its California operations over a court ruling requiring it to reclassify drivers as employees (LYFT, UBER)

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Lyft president John Zimmer warned that the company may temporarily stop operating in California due to a court ruling earlier this week ordering the ride-hailing giant to reclassify drivers as employees.

"If our efforts here are not successful it would force us to suspend operations in California," Zimmer told investors during Lyft's quarterly earnings call Wednesday, according to the San Francisco Chronicle.

Zimmer's comments echoed a similar warning from Uber CEO Dara Khosrowshahi, who told MSNBC earlier on Wednesday that "it's hard to believe we'll be able to switch our model to full-time employment quickly."

On Monday, a California court ruled that Lyft and Uber must treat their California drivers as employees rather than independent contractors under the state's  gig work law, AB-5. The ruling dealt the companies a major blow in their legal battle with the state over drivers' status.

The judge in the case issued a 10-day stay on the ruling in order to give the companies time to appeal. Both have argued that reclassifying drivers would significantly hurt their business.

"Lyft cannot comply with the injunction at the flip of a switch," Zimmer said, according to the Chronicle, adding that doing so during the coronavirus pandemic would be "nearly impossible."

He told investors that rides taken in California account for roughly 16% of the company's total trips.

Lyft and Uber have refused to reclassify drivers as employees under AB-5, initially arguing the law doesn't apply to them. But the state's top rideshare regulator determined the opposite in a June ruling, and a group of city attorneys from California cities including Los Angeles, San Francisco, and San Diego filed suit against the companies over the issue in May.

Lyft and Uber have made similar kinds of threats in the past — and it's worked

Uber and Lyft have a long history of making — and in some cases acting on — similar threats about leaving markets when faced with regulations they don't like.

Researchers from the University of California Berkeley noted in 2018 that Lyft and Uber used similar tactics in Chicago, Houston, Austin, and San Antonio in response to the cities' efforts to require drivers to undergo more rigorous background checks in order to work for the platforms. Both companies temporarily left Austin, and Uber also left San Antonio, before the regulations were revised or overturned with legislation supported by the companies.

"Uber's threats to leave a market have been an effective tool of overturning regulations," the researchers concluded.

The researchers also pointed to Uber's regulation-busting strategies such as leveraging its app to mobilize drivers and consumers in support of legislation or ballot initiatives it supports and "manipulation of public opinion data available to regulators."

Uber and Lyft have deployed similar approaches in their effort to avoid having to comply with AB-5. The companies poured $30 million each into a ballot measure that would exempt rideshare and food delivery companies from the law.

Zimmer used Wednesday's call as an opportunity to push the Lyft and Uber-backed measure, telling investors that "California voters can make their voices heard by voting Yes on Prop. 22 in November," according to the Chronicle.

The companies argue that, in addition to helping their own bottom lines, drivers also benefit from the flexibility of working as independent contractors. They have also said that new benefits that they would provide under Proposition 22 will give drivers the best of both worlds.

But driver advocacy groups have pushed back on those talking points, saying that it lets Lyft and Uber off the hook for denying drivers more robust pay, benefits, and labor protections guaranteed to traditional employees in California, and that it's the companies' own fault if they curb flexibility in response to regulations.

The state's labor commission brought a separate lawsuit against the companies earlier this month on similar grounds, claiming that Lyft and Uber have committed wage theft by misclassifying drivers. Driver advocacy group Rideshare Drivers United, which has been rounding up driver wage theft accusations, claimed that Uber and Lyft owe more than $1.3 billion in payments to drivers in California.

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NOW WATCH: We tested a machine that brews beer at the push of a button

Here's an exclusive look at the pitch deck enterprise automation startup JIFFY.ai used to raise $18 million to compete with $10 billion UiPath

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  • Enterprise automation startup JIFFY.ai raised $18 million in Series A funding led by Nexus Venture Partners in June.
  • In the first half of 2020, its customer base has doubled as the pandemic forced companies to streamline their operations via automation.
  • JIFFY.ai competes with giants UiPath and Blue Prism in the growing market for robotic process automation (RPA) — almost all companies will use RPA within the next five years, according to Deloitte.
  • Find more pitch decks in our searchable PITCH DECK LIBRARY here.

Enterprise automation startup JIFFY.ai raised an $18 million Series A round led by Nexus Venture Partners in June.

JIFFY.ai is an AI-first platform focusing on the highly regulated fintech industry.

Its tech draws on robotic process automation (RPA), machine learning, and artificial intelligence to simplify process automation and app development for companies. 

CEO Babu Sivadasan says the startup's client base has grown 200% in the first half of 2020, as an increasing number of companies look to streamline their operations.

"[In] the second quarter, actually a lot of organizations started seriously looking at automation," said Sivadasan. "Because the fundamental notion that you're going to have people working in office operating your infrastructure, operating your applications, that has been challenged."

Since it was founded in 2018, JIFFY.ai has built a global team of 150 employees and over 30 clients. This includes Fortune 500 companies like Southwest Airlines, which use JIFFY.ai to automate a wide range of processes, from bookings to pilot timesheets.

The US-based startup was co-founded by a team of 20, largely former founders and C-suite executives to disrupt the growing automation market. Almost all companies will use RPA within the next five years, according to a survey by Deloitte.

Its majority stakeholder is the non-profit organization Paanini Foundation, which partners with the startup to retrain workers whose jobs are displaced by automation. 

"We are also concerned about the potential impact of automation to existing jobs ... so we wanted to pursue build a company with a strong sense of deep social responsibility and moral character," says Sivadasan. "Being ruthless about innovation ... but at the same time being compassionate."

JIFFY.ai competes with a number of other tech giants in the RPA space like $10.2 billion UiPath, which plans to go public in early 2021, and UK-based market leader Blue Prism.

"We have had good success competing against the big players. We've just been selected by, for example, AirAsia in Malaysia," says Sivadasan. "Where we have seen success in competition is when a decision is being made based on the merits of the product."

Check out the pitch deck it used to bring investors on board:

































The CEO of the largest iPhone manufacturer reportedly predicted that China will no longer be the 'world's factory' due to Trump's trade war (FB, TWTR, GOOG, GOOGL)

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  • Foxconn chairman Young Liu said Trump's trade war against China means its "days as the world's factory are done," Bloomberg reported Wednesday.
  • Foxconn, the largest iPhone maker globally, said it plans to diversify production lines to avoid tariffs the Trump administration has imposed on Chinese-made goods, according to Bloomberg.
  • Liu told Bloomberg that the company is looking to a variety of regions including India, Southeast Asia, and the Americas.
  • Trump has waged a years-long economic battle against China, imposing extensive tariffs and targeting a range of Chinese companies, though evidence strongly suggests that most of the burden has fallen on Americans.
  • Visit Business Insider's homepage for more stories.

Over the past 50 years, China has become a global economic powerhouse, due in large part to the rise of its manufacturing industry. But the CEO of one of the largest companies in that space, Hon Hai Precision Industry Co., predicted that era could be coming to an end.

Young Liu, chairman of Hon Hai, which is more commonly known as Foxconn, told investors this week that China's "days as the world's factory are done," Bloomberg reported Wednesday.

Liu said during Foxconn's latest earnings call that Trump's trade war with Beijing has forced electronic device makers to diversify their supply chains to other countries so they don't get hit with tariffs on Chinese-made products, according to Bloomberg.

Foxconn, the largest global manufacturer of iPhones, plans to do the same. Liu told Bloomberg that 30% of the company's production capacity is now outside China, a 20% increase from the previous June and that it's interested in expanding in a variety of regions.

"No matter if it's India, Southeast Asia, or the Americas, there will be a manufacturing ecosystem in each," Liu said, according to Bloomberg.

Trump has imposed expansive tariffs on goods imported from China as part of his years-long trade war against the country, but most evidence points to a net negative impact for US companies, individuals, and the overall economy.

An analysis from Bloomberg Economics previously estimated that the Trump administration's punitive measures will end up costing the US $316 billion by the end of 2020, and independent researchers from the New York Federal Reserve, Princeton, and Columbia estimated that the tariffs would cost Americans roughly $831 per household over the course of 2019.

Tensions temporarily deescalated last December when Trump and China reached an interim trade deal, but a survey from the US-China Business Council this week found that only 7% of businesses viewed the gains from the deal as outweighing the costs incurred by two years worth of tariffs.

Trump recently reignited tensions with China with two executive orders seeking to ban viral video app TikTok and messaging app WeChat, which are owned by Chinese-firms ByteDance and Tencent, respectively, from operating within the US.

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NOW WATCH: Why thoroughbred horse semen is the world's most expensive liquid

10 things in tech you need to know today

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Good morning! This is the tech news you need to know this Thursday. Sign up here to get this email in your inbox every morning.

  1. The Trump administration is asking a court to dismiss the tech industry's legal challenge his executive order taking aim at social media companies. The lawsuit was brought in June by the Center for Democracy and Technology, a group backed by Facebook, Twitter, and Alphabet subsidiary Google, which called Trump's directive "unconstitutional."
  2. Uber and Lyft have threatened to temporarily shut down in California if a court rules their drivers must be classified as employees. A group of companies that rely on independent contractors has proposed a third way of classifying workers, which includes a benefits pool that can follow workers across apps and platforms while maintaining flexibility. 
  3. Lyft reported a 61% revenue slowdown as the coronavirus hobbles ride-hailing, but still managed to beat Wall Street expectations. Unlike Uber, Lyft has no food delivery or international businesses to rely on for revenue as the COVID-19 pandemic continues to rage across the US. 
  4. Airbnb's revenue reportedly plunged 67% in the second quarter as COVID-19 wreaks havoc on its business. The steep drop-off is a reflection of the impact of COVID-19, which has restricted travel across the globe.
  5. Facebook and Snap both reportedly inquired about acquiring TikTok rival Dubsmash. As TikTok's future in the US remains uncertain, short-form video-making apps and formats have emerged as competitors eager to attract some of TikTok's 100 million monthly US users.
  6. Instagram could face up up to $500 billion in fines in a class-action lawsuit alleging it illegally harvested biometric data. A new lawsuit accuses Instagram of collecting people's biometric data without their consent in violation of a state law.
  7. Chinese giant ByteDance is engaging in early discussions with Reliance Industries about backing TikTok's business in India. TikTok has been banned in India since June 29 as a fallout of geo-political tensions with China that led New Delhi to ban the app along with 58 other Chinese apps over security and privacy concerns, TechCrunch reported. 
  8. Palantir is planning to go public through a direct listing of its shares in late September. The company, which sells data analysis software used by governments and large companies worldwide, might still change its plans, Bloomberg reported. 
  9. Google, Facebook, Twitter and other major social media companies are working together to scenario-plan for the last three months before Election Day in the United States. Politico reports that the Silicon Valley tech giants are gaming for scenarios including a situation in which there is no quickly declared winner in November's election. 
  10. Twitter launched a new API as it tries to make amends with third-party developers. The API v2 is the first complete rebuild of Twitter's API since 2012, when the company famously began limiting how third-party developers could build on its product, The Verge reported. 

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NOW WATCH: How waste is dealt with on the world's largest cruise ship

A growing number of wealthy tech investors are bucking traditional VCs and starting subscription-based 'rolling' funds

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Sahil Lavingia

  • An increasing number of wealthy tech execs, like Facebook alum Dave Morin and Gumroad CEO Sahil Lavingia, are starting so-called "rolling funds," a new type of venture fund pioneered by AngelList that allows investors to "subscribe" on a quarterly basis.
  • Some are attracted to the user-friendliness of the model's style and ability to publicly solicit investors, which might otherwise be illegal.
  • Others see it as way to increase accountability for venture capital partners, who often make money on management fees whether the startups they fund succeed or not. 
  • By having to please investors on a quarter-by-quarter basis so they continue to contribute, rolling funds puts more pressure on fund operators.
  • Still others see rolling funds as a way to bring more diversity into the notorious homogeneity of Silicon Valley.
  • Visit Business Insider's homepage for more stories.

More and more wealthy tech execs in Silicon Valley are starting or participating in so called "rolling funds." That's a new type of fund introduced by AngelList that allows investors to subscribe on a quarterly basis, with the option to cancel and not contribute any more to it if they're dissatisfied. 

News leaked in July that early Facebook employee Dave Morin was starting a rolling fund called Offline Ventures. Gumroad CEO Sahil Lavingia announced in August he was starting a rolling fund while keeping his day job. And Ryan Hoover of Product Hunt told Business Insider he was "looking seriously" at starting a rolling fund next year.

They're joined by a small flood of tech figures starting their own rolling funds, including venture capitalist Cindy Bi, ex-Runkeeper CEO Jason Jacobs, and venture capitalist Tyler Tringas, among others.

Why tech figures are attracted to these funds varies, but a common thread running through their motivations is a desire to bypass traditional venture capital.

Easy to use, open to more investors

The user-friendliness of AngelList's platform drew Lavingia to the rolling fund model.

"Visit a page, enter subscription amount, verify identity and setup funding source," Lavingia told Business Insider, describing the process of signing up as a new fund investor, known as limited partners (LPs). "That's it! Self-serve."

AngelList handles the regulatory busywork for a fee for the funds that use it, but there are other rolling funds operating independently of AngelList willing to take on that burden themselves. For instance, Tringas said his Earnest Capital rolling fund is independent.

The cost of investing in a rolling fund can be set low, opening up the fund to a broader pool of investors. For instance, Lavingia set his minimum to join the fund at $6,250 a quarter and he raised $5 million in about a month.

It helped that he was able to take the unusual step of advertising his fund to his sizable Twitter following, something that might otherwise be illegal under SEC rules. That's because rolling funds operate under SEC Rule 506(c). Lavingia can publicize his fund provided he only takes on "accredited investors" which are people or business entities with high enough incomes or net worth that they won't endure serious financial damage if their rolling-fund investment doesn't work out.

"It's very much crowdfunding for techies with capital," a fund manager who had explored starting a rolling fund told Business Insider.

Better accountability

Another person involved in a prominent rolling fund said their past as a partner at a major VC firm left them with the belief that partners often collect fees and become rich regardless of their performance.

"I find it hard to believe that you can be connected to the entrepreneurial heartbeat collecting that many fees," this person told Business Insider, requesting anonymity to avoid drawing attention to their fund. "I personally feel that the closer you are to what it feels like to be an entrepreneur, the more hungry you are and the better you are."

The risk, though, is that the rolling fund manager may be forced into perpetually raising funds. 

"The argument you would make against this is that there's potentially more work for us if we can't establish a consistent long-term LP base," the former VC partner said. And rolling fund managers may not know exactly how much capital they will have to invest as they scout out startups to back.

"Also you could argue that it creates more short-term thinking by our LPs, who are looking not at a 10 year horizon ... they're thinking about a much shorter-term horizon," this person said.

Most traditional VC funds operate on a 10-year cycle where they raise a fund then find startups to invest in and the LPs don't expect their returns until the end.

But the added pressure to perform is part of the appeal for both the LP investor and the rolling fund manager.

"You as an LP can cancel any quarter," the former VC partner said, meaning the LP doesn't have to continue paying in every quarter. "So it actually forces us to work harder. To communicate with our LPs, prove our track record." 

More possibilities for diversity

To Kate Brodock and Allyson Kapin, founders of the The W Fund, a rolling fund that specifically looks to backs female founders and other underrepresented people in tech, the traditional VC model is well past due for an overhaul.

"The next Mark Zuckerberg is not going to be a white man," Brodock told Business Insider. "It's going to be a Black founder or a Latinx founder."

The VC world is known for the difficulties woman and people of color have when raising funds or becoming VC general partners [GPs]. A 2019 study found that just 1% of venture-capital-backed companies between 2014 and 2019 were founded by Black people, and another study from All Raise found that only 12% of U.S. venture firms and angel groups had women in "decision-making roles at the investment level" as of August 2019.

The speedy nature of rolling funds appealed to Brodock and Kapin because it allowed them to leapfrog past a protracted fundraising period— and quickly provide evidence against the extra scrutiny they expected to face as women.

"Because we can close every single quarter, we can be making investments while we continue to fundraise," Kapin said."We can turn around and show those investments, both to our LPs and to potential LPs." 

Lavingia echoed those sentiments to Business Insider, saying he hoped rolling funds could lead to "More diverse LPs, more diverse GPs and more diverse founders eventually as well."

SEE ALSO: Why this startup CEO decided to keep his day job but become a VC by launching one of the first rolling funds created with AngelList's new platform

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Instagram 'micro' and 'nano' influencers have become a powerful force for marketers, but data suggests only a small fraction of them are doing brand deals

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Brittney Turner influencer

  • New data from Socialbakers, a social-media marketing company, suggests that "micro" (10,000 to 50,000 followers) and "nano" (under 10,000 followers) influencers make up the majority of brand collaborations on Instagram.
  • Together, they consisted of around 70% of brand collaborations in 2020 as of July, Socialbakers found.
  • Still, only a small fraction of micro and nano influencers overall used #ad or other tags indicating a post was sponsored in the first quarter of 2020. This suggests there are many influencers who could potentially be making money from brand deals who currently are not.
  • Other research in 2020 has shown that some brands are shifting their budgets more toward micro influencers because of high engagement and ability to drive awareness and sales.
  • Subscribe to Business Insider's influencer newsletter: Influencer Dashboard.

In a growing trend in influencer marketing, many brands are hiring influencers with smaller followings, generally referred to as "micro" and "nano" influencers.

These influencers often have high engagement rates because of their smaller audiences that they've built strong bonds with.

"Their audience is so loyal and it's easier for them to convert to the website or drive purchases for brands," said Brittney Turner, a micro influencer and content creator coach. 

In March, the influencer-marketing agency Linqia reported that 77% of 192 marketers it surveyed said they were shifting toward working with influencers with between 5,000 and 100,000 followers in 2020.

Now, new data from Socialbakers, a social-media marketing company, sheds light on some recent trends in the micro and nano influencer space.

Here are some key takeaways from the Socialbakers data:

  • As of July, nearly 40% of all brand collaborations on Instagram in 2020 were with "micro" influencers with a follower count between 10,000 to 50,000.
  • "Nano influencers" with fewer than 10,000 followers made up about 30% of brand collaborations on Instagram during the same period.
  • Together, that means micro and nano influencers made up around 70% of sponsored posts.
  • Still, only a small percentage of influencers with smaller follower counts overall used #ad (or other tags indicating a post was sponsored), from May to July of 2020. The rates were 1.3% for influencers with fewer than 10,000 followers, 4.5% for those with 10,000 to 50,000 followers, and 7.4% for those with 50,000 to 100,000 followers. This suggests there are many influencers who could potentially be making money from brand deals who currently are not.
  • Socialbakers also found that in July, cooperations between brands and influencers of all sizes grew, suggesting the market for sponsored content deals has begun to rebound after crashing due to the pandemic.
  • In general, Socialbakers found that influencer marketing was most efficient for "extra small" brands that had fewer than 10,000 followers on Instagram. Socialbakers defined efficiency as the "ratio of average interactions on an influencer's post mentioning the brand compared to a post published by the brand itself."

Socialbakers sourced the data from its internal database, which includes over 8 million business profiles and about 5 million influencers.

To learn more about how Instagram influencers make money and how brands are partnering with them, read these additional Business Insider stories:

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Apple just removed 'Fortnite' from the App Store, and the company behind the game hit back with a scathing video that roasts the iPhone maker's most iconic ad (AAPL)

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Fortnite 1984 Apple ad parody

  • Epic Games, the company behind "Fortnite," aired a video on Thursday roasting Apple and its iconic "1984" television ad after Apple yanked the game from the App Store. 
  • Epic also filed a lawsuit against Apple on Thursday, alleging the company engaged in "unfair and anti-competitive actions." 
  • Epic's video said Apple retaliated against Epic for defying "the App Store Monopoly" and urged "Fortnite" players to "join the fight to stop 2020 from becoming '1984.'" 
  • Titled "Nineteen Eighty-Fortnite," the video was a clear reference to Apple's famous "1984" ad, in which a heroine destroys a screen bearing a dictator's face using a sledgehammer.
  • The war between the two companies stems from a new policy Epic instituted that allows players to make in-game purchases directly through Epic, bypassing Apple and Google Play and the 30% cut their app stores take from app purchases. 
  • Visit Business Insider's homepage for more stories.

Epic Games is firing back at Apple with a parody of the company's most iconic ad after Apple yanked "Fortnite" from the App Store. 

The game company on Thursday posted a short film titled "Nineteen Eighty-Fortnite," a play on Apple's "1984" Super Bowl television ad. The video was in response to Apple nixing "Fortnite" from the App Store, which the company did after Epic began offering players the option to pay Epic directly for in-game purchases rather than going through the App Store, a violation of Apple's policies. 

In response, Epic filed a lawsuit seeking an injunction against Apple, claiming that Apple had engaged in monopolistic practices through its App Store. 

In Epic's video, which premiered at 4 p.m. ET on Thursday, an animated heroine runs into a room where the walls are printed with Apple's App Store policies. The room is filled with drone-like people watching a large screen, on which a dictator with a giant apple for a head — complete with a worm sticking out — proclaims that, "This power is ours and ours alone." The woman, who is carrying a hammer that looks like a unicorn, swings the hammer at the screen, destroying it. As she walks out, the following message scrolls across the screen: 

"Epic Games has defied the App Store Monopoly. In retaliation, Apple is blocking Fortnite from a billion devices. Join the fight to stop 2020 from becoming '1984.' #FreeFortnite."

You can watch the full video below:

 

The video was a spoof of Apple's most famous ad of all time, "1984." The dystopian-themed ad, which premiered during the 1984 Super Bowl between Washington D.C.'s football team and the Los Angeles Raiders, was a promotion for the Macintosh computer before its launch. Directed by "Blade Runner" director Ridley Scott, the ad cost $500,000 to create and almost never aired, as it was unpopular with Apple's board and focus groups. 

Epic's video follows the same storyline as Apple's ad: a woman runs toward a screen bearing the face of a dictator, then swings a sledgehammer at the screen, destroying it. At the end of Apple's ad, words scroll on the screen announcing that Apple would introduce the Macintosh on January 24, and that people would see "why 1984 won't be like '1984'," a reference to George Orwell's famous dystopian novel.

Epic Games v. Apple

With the video and the legal paperwork Epic filed Thursday, the company is essentially declaring war on Apple and its App Store. 

It all started when Epic announced the "Fortnite Mega Drop," a permanent 20% discount on V-Bucks, the in-game currency used in "Fortnite." The new prices are available on PCs and consoles, but not necessarily for mobile gamers: because Apple and Google take a 30% cut on purchases made within their respective app stores, Epic says it's unable to provide the 20% discount for those who pay through those stores. 

Instead, Epic is directing players to use its direct payment system so players can "get the best deal on V-Bucks." 

But Apple said the move violated its App Store policies, claiming Epic "did so with the express intent of violating the App Store guidelines regarding in-app payments that apply to every developer who sells digital goods or services," according to a statement provided to The Verge. Apple yanked "Fortnite" from the store.

Almost immediately, Epic filed an injunction against Apple, claiming that the company engaged in "unfair and anti-competitive actions" undertaken "to unlawfully maintain its monopoly" in the app market. 

Epic's lawsuit comes during a moment of intense scrutiny for Apple: CEO Tim Cook recently testified before the House antitrust subcommittee over Apple's treatment of app developers and how it applies its App Store policies. 

SEE ALSO: Read Apple's response for removing 'Fortnite' from the App Store after Epic Games skirted the tech giant's controversial 30% fee

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VOICE ASSISTANTS IN HEALTHCARE: An inside look at 3 emerging voice use cases healthcare providers can deploy to cut costs, build loyalty, and drive revenue

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5d540e66cd97843704229bac 960 710Voice is making waves across industries, but the transformative power of the technology is now at a tipping point in healthcare. The opportunity for voice in healthcare is pegged to mount as the global health virtual assistant market is expected to reach $3.5 billion in 2025. 

US healthcare providers' interest in voice tech is being catalyzed by recent technological breakthroughs growing the tech's potential to transform legacy operations.

Voice tech boasts five distinct advantages that heighten its disruption potential in healthcare and the tech is being optimized for the healthcare sphere, which is increasing the visibility of voice in health and opening the door for voice assistants to perform more sensitive and complex healthcare actions. There are also several pain points within healthcare that up the pressure on providers to tap into the voice opportunity. 

In this report, Business Insider Intelligence outlines the voice opportunity in healthcare and explores the drivers propelling voice adoption in the healthcare realm. We then examine three of the highest-value voice use cases in healthcare — clinical documentation, remote care, and clinical support — and provide examples of early moving health systems and health tech companies implementing voice in each application. 

Here are some of the key takeaways from the report: 

  • Health systems that deploy voice tech to facilitate clinical documentation can reduce physicians' administrative burden, increase patient volume and billable revenue, and eliminate transcription costs.
  • By leveraging voice to increase touchpoints with patients outside the clinic, healthcare organizations can open the opportunity to shrink costs associated with poor medication adherence and slash value-based care (VBC) penalties stemming from preventable readmissions.
  • Healthcare providers can reform diagnostics and better position themselves to deliver preventative medicine by deploying voice technology that can pinpoint diseases based on patients' speech characteristics.

In full, the report:

  • Explores why and how voice is disrupting healthcare. 
  • Details the three key applications where US health systems can apply voice technology. 
  • Offers evidence on how voice assistants provide value in each of the selected voice use cases. 

Want to learn more about the fast-moving world of digital health? Here's how to get access:

  1. Purchase & download the full report from our research store. >> Purchase & Download Now
  2. Sign up for Digital Health Pro , Business Insider Intelligence's expert product suite keeping you up-to-date on the people, technologies, trends, and companies shaping the future of healthcare, delivered to your inbox 6x a week. >>Get Started
  3. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >>Learn More Now
  4. Current subscribers can read the reporthere.

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'Fortnite's' Epic Games learned how to evade Apple's 30% rate before it got kicked off the App Store. Here's why developers have long been concerned by the fee. (AAPL)

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tim cook apple

  • Apple just yanked the "Fortnite" app from its store after Epic Games added an in-game direct payment option for players.
  • The new option would mean that Epic Games could skirt Apple's standard 30% commission that it says it charges all developers in the App Store for in-app purchases.
  • Developers have long aired their frustration with the company, claiming the 30% fee gives Apple and its own services an unfair advantage in the market.
  • The "Fortnite" app removal comes as Congress continues to investigate Apple over whether or not the company benefits from anticompetitive business practices.
  • Visit Business Insider's homepage for more stories.

Apple just pulled "Fortnite," the wildly popular video game, from its App Store after the game's parent company Epic Games added a new direct payment option, which allows players to make in-game purchases.

The new payment method means that Epic Games could skirt the 30% commission fee that Apple says it charges all developers in its App Store, and Apple said it removed the "Fortnite" app because the direct payment system violates company policies. Now, Epic Games has filed an injunction against Apple, accusing it of engaging in anticompetitive behavior.

Developers have long taken issue with Apple's commission fee, saying the high cut gives the company and its own services an unfair advantage in the market. For example, a new email app called Hey said Apple was coercing it to reclassify its $99 annual subscription fee as an in-app purchase in mid-June. Doing so would allow Apple to take a cut from those profits.

Apple's 30% App Store commission was expected to be the hot point of contention between lawmakers and CEO Tim Cook during a late July congressional antitrust hearing.

One of the Representatives, Hank Johnson, said during the hearing that Apple's position as the operator of the App Store gives the company "immense power over small businesses." Lawmakers also questioned Cook over whether the company applies the same policies to all developers.

"We treat every developer the same," Cook said during the hearing. He also likened app store competition to "a street fight for market share" when asked what is preventing Apple from raising its fees.  

App makers later told Business Insider's Lisa Eadicicco that they disagree with that assessment, including Justin Payeur, president and cofounder of National Education Technologies, which makes a parental control app called Boomerang. Payeur said Apple's App Store is not the "vibrant, competitive environment" that the company makes it out to be.

"We've all been, for lack of a better term, neutered by what Apple did," Payeur told Eadicicco.

SEE ALSO: 'We've all been neutered by what Apple did:' App makers are rallying against Apple's claims that it creates a level playing field for everyone

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WeWork nabbed a fresh $1.1 billion in financing from SoftBank as the coworking giant's membership dropped

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Sandeep Mathrani

  • WeWork's membership dropped by 81,000 in the second quarter, per financial information sent to employees on Thursday. 
  • The company's revenue increased 9% year-on-year to $882 million.
  • SoftBank extended another $1.1 billion in debt financing in the second quarter, giving WeWork $4.1 billion in cash and unfunded cash commitments. 
  • For more WeWork stories, click here.

WeWork saw its membership number fall in the second quarter, but the coworking giant continued to add locations and nabbed a fresh $1.1 billion in financing from SoftBank. 

The company lost 81,000 memberships over the second quarter, per financial highlights sent to employees on Thursday. 

The company ended the second quarter with 612,000 memberships, down from 693,000 memberships at the start of the quarter. Now, WeWork's numbers are more in line with the third quarter of 2019, when it had 609,000 memberships. 

"The numbers illustrate that similar to virtually every company around the world, COVID-19 has had an impact on our business," chief financial officer Kimberly Ross wrote in the Thursday email reviewed by Business Insider. "However, they also show our five year plan in action."

WeWork's revenue ticked up in the second quarter to $882 million, a 9% increase year-on-year, as it continues a long-term restructuring plan. WeWork's first-quarter revenue came in at $1.1 billion, up 45% year-over-year. 

Ross wrote that WeWork's financial position is "strong," strengthened by the $1.1 billion in new debt financing from lead investor SoftBank. 

"Though revenue is down from Q1 due to COVID-19-related business disruptions, our overall financial foundation as well as our sales pipeline continues to grow stronger," Ross wrote in the email. 

WeWork did not provide information on occupancy rates at its vast network of offices spread in cities across 38 countries. 

See more:Wells Fargo is ditching a 750-person WeWork space, while Citi inked a deal with the flex-office giant far from a big city. Here's a look at how financial firms are retooling their real estate.

Among the other data included in the WeWork email:

  • Free cash outflow: $671 million, "an increase in outflows from Q1 but, notably, a nearly 50% improvement from our peak outflow of $1.3 billion in Q4'19." That cash outflow included $116 million in one-time restructuring costs, like severance for layoffs that affected at least hundreds of employees. 
  • Overall footprint: 843 locations across 150 cities and 38 countries; up from 828 locations across 149 cities and 38 countries the previous quarter.
  • Total memberships: 612,000, a 16% year-over-year increase. Enterprise – companies with more than 500 employees – made up 48% of those memberships, versus 45% last quarter.

Enterprise customers like BlackRock can write bigger and more consistent checks than the entrepreneurs and freelancers who made up WeWork's original customer base. 

See more:WeWork is ditching a major Manhattan office it hasn't even moved into yet — and it's the first big step in a turnaround that's put its entire real-estate portfolio under review

WeWork, like other real estate and flexible-office providers, is grappling with the global effects of the pandemic on its business.

The company has kept its US locations open and is reconfiguring spaces to include more sanitation and distance. It's eyed schools as one new customer base, offering more than 3,000 Chinese students at New York University the option to take fall classes in a Shanghai WeWork. 

Earlier this month, WeWork starting allowing members to access any global location, as some customers look to return to an office, but perhaps not their home base. 

The company is also in the process of bringing its New York employees back to the office, with a rolling plan that started in late June

SoftBank has invested more than $10 billion in debt and equity in WeWork. At its height, the Japanese investor valued WeWork at $47 billion, but most recently valued the company at $2.9 billion. 

SoftBank, WeWork, and some shareholders have been embroiled in a legal dispute for the last few months. As part of SoftBank's October bailout of WeWork, the investor agreed to a $3 billion stock buyback program and a $1.1 billion debt investment. 

But SoftBank, citing multiple closing conditions that weren't met, backed out of the deal, which was set to close April 1.

Two WeWork board members representing minority investors and cofounder Adam Neumann sued SoftBank in litigation that's expected to take months to complete. Last month, WeWork asked a judge to dismiss the suit from the pair of board members, saying they didn't have authority to sue on behalf of WeWork. 

Have a tip? Contact this reporter via encrypted messaging app Signal at +1 (646) 768-1627 using a non-work phone, email at mmorris@businessinsider.com, or Twitter DM at @MeghanEMorris. (PR pitches by email only, please.) You can also contact Business Insider securely via SecureDrop.

SEE ALSO: WeWork is leasing a big new office in Jersey City to house the headquarters of a planned spin-off from pharma giant Merck. Here's how the deal will work, and why it's a big win for the struggling coworking giant.

READ MORE: WeWork faces 3 new discrimination and harassment lawsuits, including a complaint that says a manager brought knives and a crossbow to work

SEE ALSO: WeWork is embracing big brokerage firms to help it fill space it gobbled up in NYC and Los Angeles. It's a key pivot for the coworking giant as leasing demand slows.

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