Welcome back to This Week in Apps, the TechCrunch series that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending three hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

Apple reduces App Store commissions to 15% for ‘vast majority’ of developers

The changes apply to developers with less than $1 million in revenue.

Apple this week announced a major shakeup to its App Store commission rate. The company, as of January 1, 2021, will only charge App Store developers 15% on paid apps and in-app purchases if their business has not exceeded $1 million in proceeds during 2020 for all their apps combined. Qualification for the new App Store Small Business Program, as it’s called, will be re-assessed revenues on an annual basis going forward.

The changes arrive at a time when Apple has been under increased regulatory scrutiny over how its App Store operates, which includes antitrust investigations in the U.S. and E.U. It has also waged war with developers throughout the year over in-app purchases, leading the company to revise its already complex rules even further, and spell out how and when it gets to charge its so-called “Apple tax.” And it’s in the middle of a nasty legal battle with Fortnite maker Epic Games, which doesn’t want to be forced to use Apple payments or even, necessarily, the App Store.

The commission changes may help silence some disgruntled voices from the wider app development community, while giving Apple a way to show regulators that it’s enabling fair competition.

However, several of Apple’s largest and harshest critics reacted negatively to the news.

The advocacy group, the Coalition for App Fairness, which includes Epic, Basecamp, Deezer, Match Group, Spotify and many others, said: “developers want a level playing field from Apple, not a symbolic gesture.” They argued that Apple still owns the customer relationship, the threshold of $1M is arbitrary, and they said the majority of developers who “generate livable revenue,” won’t benefit.

Match, Spotify and Epic separately echoed these sentiments in statements of their own.

Apple, though, had claimed the change would benefit the “vast majority” of the App Store development community. Today its App Store hosts 1.8 million apps that reach more than 1.5 billion Apple devices.

Individual developers we spoke to, including those who would qualify for the program, weren’t complaining. And many were fairly surprised by Apple’s move.

“I think it’s fair to say that this change wouldn’t have happened without either the impending antitrust investigations, or the Epic lawsuit. But something can be both a very clever piece of political manoeuvring, and still genuinely welcome and beneficial to the vast majority of developers out there,” said indie developer James Thomson, maker of the PCalc app and others.

“We fall significantly under the million dollar threshold, so we’re looking at roughly a 20% increase in our income under the new system. We’re in a much better position than most businesses under the pandemic, in that our sales are purely digital and people always need calculators (or dice), but we’ve certainly seen a decrease in sales over the last eight months. I can see the current situation taking a good while to resolve, so that extra revenue is appreciated,” he added. “These changes will particularly help the small developers who have traditionally been the heart of the developer community, and I as happy about this, as I am surprised,” Thomson said.

Others also said they were generally happy with the changes. But some expressed reservations about the details of how the program works.

“Overall, I’m very pleased with this new program,” said developer David Smith, maker of Widgetsmith, Watchsmith, Sleep++ and a range of other iOS apps. “It will help countless small developers who can really benefit from that extra margin. I’m excited for all the indie developers who will now be able to focus full time on their apps just that little bit sooner.”

But Smith noted that it was odd that the program isn’t applied in a way that’s similar to a graduated tax rate, where, he explained, “your first $1M is at 15% and the rest at the higher rate.”

“The proposed system creates an awkward differentiation between developers, and one of the things I’ve always appreciated most about the App Store was that it treats developers equally,” Smith continued. “It also creates a strange disincentive for growth for mid-sized businesses who are approaching the threshold.”

We turned to third-party analytics firms to try to better understand the market.

According to App Annie data, around 98% of all iOS developers in 2019 (meaning, unique publisher accounts) fell under the $1 million annual consumer spend threshold. This supports Apple’s claims that the “vast majority” of developers would benefit. This group of developers accounts for 567,000 unique apps, or 93% of all apps generating revenue through in-app purchases.

Combined, their revenues represented just under 8% of the overall App Store revenue share — in other words, it’s money Apple could stand to lose.

App Annie also found that the group of mid-range developers who are “nearing” that $1 million threshold is really small. The data indicates roughly 0.5% of developers are making between $800,000 and $1 million. And just over 1% are in the $500,000-$800,000 range.

Most developers have much smaller revenue streams, with 87.7% making less than $100,000 in 2019.

Some expressed concern that Apple’s system would unfairly penalize developers who made just $1 over the $1 million threshold, and then trap them at the higher rate (30%).

But others suspected that the percentage of developers who were growing “slowly” at over $800,000 in ARR was actually pretty small.

From the data we’ve collected, it seems that subscription-based apps tend to keep growing fairly quickly once they pass that $1 million threshold. According to data from subscription platform RevenueCat, the apps on its platform grow, on average, at 1.5x year-over-year. So once an app crossed the $1 million threshold, the most likely scenario is that it would make $1.5 million the next year. Plus, the apps that are “nearing” the threshold tend to be growing even faster than the average rate, we understand. And they rarely backslide.

“Apple has made a lot of changes to the App Store over the years, and this is one of the first I’ve seen where there’s really not much to complain about,” said RevenueCat CEO Jacob Eiting. “It’s impactful to the App Store economy broadly and meaningful to individual indie developers. Sure it may have been for PR and they might not have a lot of downside in doing this, but it’s genuinely a great thing for so many developers,” he said.

We’ll have more data on this subject in the weeks ahead. 

Parler’s funders revealed…it’s the Mercers; parents warned about the app

The “Free speech” app Parler rising in the charts after Facebook and Twitter increased fact-checks, turns out to be funded by prominent conservative donor and Trump supporter Rebekah Mercer, The WSJ revealed.

Rebekah is the daughter of Robert Mercer, the hedge fund manager and principal investor in Cambridge Analytica — the data analytics firm behind the largest data leak in Facebook history, where 87 million users had their data harvested for the purposes of political advertising. The Mercers have also backed Breitbart News, the Heritage Foundation think tank, the Federalist Society, a super PAC that initially backed Ted Cruz’s bid for the Republican presidential nomination (before switching to Trump) and Citizens United (which distributed a 2007 anti-Clinton movie and succeeded in a Supreme Court ruling that reversed campaign finance restrictions), among other things.

This week, the nonprofit ParentsTogether issued a warning to parents about Parler, saying that the app’s weak moderation policies and extremist user base put kids at risk of exploitation, abuse and recruitment for racist violence. The organization described Parler as hosting dangerous content, including hate speech, incitements of violence and widespread disinformation.

In addition, the group was concerned that while Apple’s App Store rates the app at 17+, Google Play has it listed as suitable for kids ages 13+.

“All parents of children under age 18 to immediately check their kids’ phones and tablets to ensure that their children have not installed Parler,” the group warned parents, in a statement. “If your child has installed Parler, we strongly recommend that you delete their account and the app.”

Twitter launches Fleets

Twitter this week launched its own version of Stories — aka “Fleets” — to its global user base. The product, which allows users to post ephemeral content that disappears in 24 hours, had already rolled out to select markets, including Brazil, India, Italy, South Korea and, most recently, Japan. The rollout almost immediately ran into some snags, with Fleets suffering performance and stability issues. Twitter said it would pause things while it worked this out. On Thursday, the company announced the feature was globally available.

Reactions to Fleets has been mixed. Some users hate the feature, which is designed to encourage more users to post to Twitter, when they’ve otherwise been too shy to participate — largely because of Twitter’s “cancel culture” vibe where mistakes, bad takes and unpopular opinions are harshly criticized, even when they’re more minor offenses. It’s not clear how a Stories feature resolves this, however, as Fleets are still being published to Twitter’s public social network.

Twitter also said it will begin testing a Clubhouse rival where users will join audio chat rooms.

These changes follow the activities by activist investor Elliott Management Group, which took a sizable stake in Twitter earlier this year, along with Silver Lake. The firms did so with a plan to push the company for more innovation and new executive leadership. The companies later struck a deal to spare Twitter CEO Jack Dorsey’s ousting, gain board seats, and put someone on the board with expertise in technology and artificial intelligence. Dorsey disagreed with the characterization that their involvement had any impact on product development.

Platforms

• Apple’s IDFA is targeted by EU privacy complaints. Apple had already told advertisers they’ll soon have to allow users the option to opt-out of ad tracking, but the new complaints are more about the fact that IDFA was ever created and stored in the first place, and that Apple’s planned changes don’t go far enough as they restrict its use for third parties, but not Apple itself.
• Apple’s Developer Transition Kits (DTKs) help developers get their apps ready for Apple’s silicon. But it turns out they won’t be able to install iOS or iPadOS apps like M1 Macs can.
• Google reminds Android developers they only have until January 18, 2021 to get approval to continue using background location data if they want to stay on Google Play.
• Apple releases a new version of iOS 14.2 for iPhone 12. The update appears to fix the iPhone 12 mini lock screen issue that caused some users’ lock screens to not respond to touches. The update also fixes issues with MMS messages, Made for iPhone hearing devices and more.
• Google also reminds Android developers that, starting Augut 2021, Google Play will require all apps to use the Android App Bundle publishing format and make other changes.
• Apple now allows developers to market and distribute their subscriptions with offer codes. These one-time, alphanumeric codes can be redeemed either on the App Store or within the app itself, allowing developers to acquire and retain customers or win back lapsed subscribers with special deals. Here are some tips on putting them to work.
• Apple’s iOS 14.3, beta 2 indicates that Apple will do away with the intermediate step of opening the Shortcuts app when app shortcuts are launched. This was one of the major pet peeves from the iOS 14 home screen customization trend, where users designed iOS themes using custom icons and widgets.

Services

Security & Privacy

• Dating app Bumble’s vulnerabilities puts Facebook Likes, locations and pictures of 95 million online daters at risk. Bumble took six months to fix the flaws and says no user data had been compromised.
• TikTok expands parental controls to include search, commenting and account privacy. The company launched Family Pairing in April, allowing parents to link their account to their teen’s in order to manage screen time, direct messaging and whether or not the teen’s account would be in “Restricted” mode — a special mode which limits TikTok’s feed to a safer set of more moderated content. This week, it also gave parents the ability to control whether the teen’s Liked Videos are visible to others, control who can comment on the teen’s videos and decide whether the teen is allowed to use TikTok search.
• Messaging app Go SMS Pro exposed millions of users’ private photos and files. The app, popular on Android, didn’t respond to security researchers about the problem. Typically, companies are given a 90-day deadline before vulnerabilities are made public.

Apps in the News

• Epic Games added video chat to Fortnite, via a Houseparty integration. The company bought the video chat app last year. Players use their phone or tablet as the webcam while they play on PCs, PS4 or PS5.
• Epic Games sues Apple in Australia too. The Fortnite maker is currently in a legal battle in the U.S. over Apple’s requirement to use Apple Pay and pay commissions on in-app purchases. In an interview this week, Epic Games founder Tim Sweeney likened the fight with Apple to a fight for civil rights. (That’s a bit much, we’d say.)
• Snap acquired Voisey, a U.K.-based app that lets users create music tracks and videos by overlaying their own vocals. The app had raise $1.88 million to date, but deal terms weren’t immediately available.

• Google Maps is updated with more COVID info and adds its Assistant driving mode. The COVID layer in Google Maps on Android and iOS can now show the number of all-time detected cases in an area, links to COVID resources from local governments and how busy transit lines are. The driving mode can read texts and lets you control your music from Maps.
• Facebook’s Messenger Kids redesigned to look more like Messenger. The updated app puts chats in a more traditional vertical list, with message and media previews, and bold text and blue dots to indicate their unread status. It also added a new tabbed navigation, which better highlights the separation between apps and games.
• YouTube launches 15-second audio ads aimed at users who listen to music or podcasts while the app plays in the background.
• Apple’s Shazam passes 200 million monthly active users.
• Instagram expands its Guides features and upgrades Search. Guides now allow creators to share tips, resources and other long-form content in a dedicated tab on their profiles. Now, everyone can make guides for Products, Places and Posts. Users can also now search by keywords, instead of just by names, usernames, hashtags and locations.
• Instagram also updates its Threads mobile messaging app. The app now adds a tab for easier navigation between stories and statuses. All users should also now have the tabbed inbox where they can see everyone’s stories, not just close friends, and have the option to publish to stories, not just close friends’ stories.
• Facebook sued an operator of Instagram clone websites. The operator had scraped Instagram data of some 100,000 accounts using its own 30,000 fake accounts that pretended to be humans to avoid detection.

• SoundCloud adds profile verification with official blue checks.
• App Growth Awards announce their finalists. 
• Google launches iOS 14 widgets for Gmail, Drive and Fit. Says Calendar and Chrome widgets will come soon.
• State and federal investigators are preparing to bring antitrust charges against Facebook over its acquisition of Instagram and WhatsApp, The Washington Post reports.
• Twitter and Facebook sat for another congressional tech hearing that again largely served to give lawmakers a chance to just talk about whatever they wanted, instead of the topic at hand: social media’s role during the election. The CEOs were asked about their apps’ addictiveness, their algorithms, their approaches to misinformation and more.

Deadpool

Trends

• U.S. mobile strategy game spending surges 22% to $2.8 billion in the first 10 months of 2020, Sensor Tower reports. The top game by player spending during this time was Clash of Clans, which generated close to $262 million in the U.S.
• Top home screen widget apps have reached 1 in 7 U.S. iPhones, another Sensor Tower report claims. The five most popular apps — Widgetsmith, Color Widgets, Photo Widget: Simple, WidgetBox and Photo Widget — have collectively seen 13 million iPhone installs since the launch of iOS 14. Globally, they’ve reached 45 million installs to date.

 

• Language learning app Duolingo confirms its raise of $35 million on a $2.4 billion valuation. The news was reported last week, but the numbers are now official. The app was valued at $1.65 billion earlier this year.
• Baidu to acquire Joyy’s Chinese live-streaming service YY for $3.6 billion. The search giant has been struggling to fight newcomers, like ByteDance, and video giant Kuaishou. Last year, Joyy’s YY took a $1.45 billion majority stake in Bigo, which operates streaming app Bigo Live and TikTok rival Likee.
• OpenPhone raises $14 million to replace outdated corporate phone systems with an app. Yammer founder David Sacks’ Craft Ventures led the round.
• Flipkart acquires AR startup Scapic to build an immersive shopping experience. Deal terms were undisclosed.
• Athlete social platform Strava raises $110 million in Series F financing from TCV and Sequoia Capital, with by Dragoneer Investment Group and existing investors including Madrone Capital Partners, Jackson Square Ventures and Go4it Capital.
• Yubo raises $47.5 million for its social app offering live-streaming rooms, now used by 40 million users. Existing investors Idinvest Partners, Iris Capital, Alven and Sweet Capital returned, and new investor Gaia Capital Partners joined.
• English learning app AllRight raises $5 million from Genesis Investments. The Ukraine startup combines real teachers with AI-powered tutors.
• ContextLogic, the maker of the mobile e-commerce app Wish, filed to go public. Wish saw revenues slow in 2019, but has grown more quickly in 2020. In the first nine months of 2019, Wish generated $1.33 billion in revenue compared with $1.75 billion during the same period in 2020, or up 32%.
• Roblox files for its IPO, noting it has lost $206 million on $589 million in revenue, has 31.1 million daily active users who now spend up to 22.2 billion hours in app, a figure up 122% year-over-year.

Amazon’s GameOn

Amazon this week launched GameOn for Android, an app that lets users record 30-second to five-minute long gameplay clips — including through a “Recall” feature that saves the clip after it happens. Clips are then shared the GameOn social network or elsewhere on social media. The app supports more than 1,000 games at launch, including PUBG Mobile, Crossy Road, Final Fantasy Brave Exvius and Angry Birds 2. A selfie camera lets gamers add their own commentary to the clips. Winners of weekly challenges get special profile badges. The launch follows Amazon’s release of its cloud gaming platform Luna.

Google Pay

Google Pay launched a major redesign of its app on Android and iOS this week with a ton of new features, including a mobile bank account. The company partnered with 11 banks, including Citi and Stanford Federal Credit Union, to launch Plex, a mobile banking service where accounts are held at partner banks but Google Pay operates as the front end. Plex users will have no monthly fees, overdraft charges or minimum balances and can pay both businesses and friends from their account. They can also explore offers and rewards to save money while shopping and get spending insights, including from their connected bank accounts outside the app. Another new feature makes it easier to split bills with friends, like restaurant checks, rent or utilities.

Moment’s RTRO app

RTRO, launched earlier this year, offers a way to record and share vintage-looking photos and video. This week, the app was updated with “Instant Film,” which lets you emulate instant film photos powered by the app’s “analog effects engine.” The resulting photos will give you the feel of a instant camera pic.

]]>

Welcome back to This Week in Apps, the TechCrunch series that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending three hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

Apple reduces App Store commissions to 15% for ‘vast majority’ of developers

The changes apply to developers with less than $1 million in revenue.

Apple this week announced a major shakeup to its App Store commission rate. The company, as of January 1, 2021, will only charge App Store developers 15% on paid apps and in-app purchases if their business has not exceeded $1 million in proceeds during 2020 for all their apps combined. Qualification for the new App Store Small Business Program, as it’s called, will be re-assessed revenues on an annual basis going forward.

The changes arrive at a time when Apple has been under increased regulatory scrutiny over how its App Store operates, which includes antitrust investigations in the U.S. and E.U. It has also waged war with developers throughout the year over in-app purchases, leading the company to revise its already complex rules even further, and spell out how and when it gets to charge its so-called “Apple tax.” And it’s in the middle of a nasty legal battle with Fortnite maker Epic Games, which doesn’t want to be forced to use Apple payments or even, necessarily, the App Store.

The commission changes may help silence some disgruntled voices from the wider app development community, while giving Apple a way to show regulators that it’s enabling fair competition.

However, several of Apple’s largest and harshest critics reacted negatively to the news.

The advocacy group, the Coalition for App Fairness, which includes Epic, Basecamp, Deezer, Match Group, Spotify and many others, said: “developers want a level playing field from Apple, not a symbolic gesture.” They argued that Apple still owns the customer relationship, the threshold of $1M is arbitrary, and they said the majority of developers who “generate livable revenue,” won’t benefit.

Match, Spotify and Epic separately echoed these sentiments in statements of their own.

Apple, though, had claimed the change would benefit the “vast majority” of the App Store development community. Today its App Store hosts 1.8 million apps that reach more than 1.5 billion Apple devices.

Individual developers we spoke to, including those who would qualify for the program, weren’t complaining. And many were fairly surprised by Apple’s move.

“I think it’s fair to say that this change wouldn’t have happened without either the impending antitrust investigations, or the Epic lawsuit. But something can be both a very clever piece of political manoeuvring, and still genuinely welcome and beneficial to the vast majority of developers out there,” said indie developer James Thomson, maker of the PCalc app and others.

“We fall significantly under the million dollar threshold, so we’re looking at roughly a 20% increase in our income under the new system. We’re in a much better position than most businesses under the pandemic, in that our sales are purely digital and people always need calculators (or dice), but we’ve certainly seen a decrease in sales over the last eight months. I can see the current situation taking a good while to resolve, so that extra revenue is appreciated,” he added. “These changes will particularly help the small developers who have traditionally been the heart of the developer community, and I as happy about this, as I am surprised,” Thomson said.

Others also said they were generally happy with the changes. But some expressed reservations about the details of how the program works.

“Overall, I’m very pleased with this new program,” said developer David Smith, maker of Widgetsmith, Watchsmith, Sleep++ and a range of other iOS apps. “It will help countless small developers who can really benefit from that extra margin. I’m excited for all the indie developers who will now be able to focus full time on their apps just that little bit sooner.”

But Smith noted that it was odd that the program isn’t applied in a way that’s similar to a graduated tax rate, where, he explained, “your first $1M is at 15% and the rest at the higher rate.”

“The proposed system creates an awkward differentiation between developers, and one of the things I’ve always appreciated most about the App Store was that it treats developers equally,” Smith continued. “It also creates a strange disincentive for growth for mid-sized businesses who are approaching the threshold.”

We turned to third-party analytics firms to try to better understand the market.

According to App Annie data, around 98% of all iOS developers in 2019 (meaning, unique publisher accounts) fell under the $1 million annual consumer spend threshold. This supports Apple’s claims that the “vast majority” of developers would benefit. This group of developers accounts for 567,000 unique apps, or 93% of all apps generating revenue through in-app purchases.

Combined, their revenues represented just under 8% of the overall App Store revenue share — in other words, it’s money Apple could stand to lose.

App Annie also found that the group of mid-range developers who are “nearing” that $1 million threshold is really small. The data indicates roughly 0.5% of developers are making between $800,000 and $1 million. And just over 1% are in the $500,000-$800,000 range.

Most developers have much smaller revenue streams, with 87.7% making less than $100,000 in 2019.

Some expressed concern that Apple’s system would unfairly penalize developers who made just $1 over the $1 million threshold, and then trap them at the higher rate (30%).

But others suspected that the percentage of developers who were growing “slowly” at over $800,000 in ARR was actually pretty small.

From the data we’ve collected, it seems that subscription-based apps tend to keep growing fairly quickly once they pass that $1 million threshold. According to data from subscription platform RevenueCat, the apps on its platform grow, on average, at 1.5x year-over-year. So once an app crossed the $1 million threshold, the most likely scenario is that it would make $1.5 million the next year. Plus, the apps that are “nearing” the threshold tend to be growing even faster than the average rate, we understand. And they rarely backslide.

“Apple has made a lot of changes to the App Store over the years, and this is one of the first I’ve seen where there’s really not much to complain about,” said RevenueCat CEO Jacob Eiting. “It’s impactful to the App Store economy broadly and meaningful to individual indie developers. Sure it may have been for PR and they might not have a lot of downside in doing this, but it’s genuinely a great thing for so many developers,” he said.

We’ll have more data on this subject in the weeks ahead. 

Parler’s funders revealed…it’s the Mercers; parents warned about the app

The “Free speech” app Parler rising in the charts after Facebook and Twitter increased fact-checks, turns out to be funded by prominent conservative donor and Trump supporter Rebekah Mercer, The WSJ revealed.

Rebekah is the daughter of Robert Mercer, the hedge fund manager and principal investor in Cambridge Analytica — the data analytics firm behind the largest data leak in Facebook history, where 87 million users had their data harvested for the purposes of political advertising. The Mercers have also backed Breitbart News, the Heritage Foundation think tank, the Federalist Society, a super PAC that initially backed Ted Cruz’s bid for the Republican presidential nomination (before switching to Trump) and Citizens United (which distributed a 2007 anti-Clinton movie and succeeded in a Supreme Court ruling that reversed campaign finance restrictions), among other things.

This week, the nonprofit ParentsTogether issued a warning to parents about Parler, saying that the app’s weak moderation policies and extremist user base put kids at risk of exploitation, abuse and recruitment for racist violence. The organization described Parler as hosting dangerous content, including hate speech, incitements of violence and widespread disinformation.

In addition, the group was concerned that while Apple’s App Store rates the app at 17+, Google Play has it listed as suitable for kids ages 13+.

“All parents of children under age 18 to immediately check their kids’ phones and tablets to ensure that their children have not installed Parler,” the group warned parents, in a statement. “If your child has installed Parler, we strongly recommend that you delete their account and the app.”

Twitter launches Fleets

Twitter this week launched its own version of Stories — aka “Fleets” — to its global user base. The product, which allows users to post ephemeral content that disappears in 24 hours, had already rolled out to select markets, including Brazil, India, Italy, South Korea and, most recently, Japan. The rollout almost immediately ran into some snags, with Fleets suffering performance and stability issues. Twitter said it would pause things while it worked this out. On Thursday, the company announced the feature was globally available.

Reactions to Fleets has been mixed. Some users hate the feature, which is designed to encourage more users to post to Twitter, when they’ve otherwise been too shy to participate — largely because of Twitter’s “cancel culture” vibe where mistakes, bad takes and unpopular opinions are harshly criticized, even when they’re more minor offenses. It’s not clear how a Stories feature resolves this, however, as Fleets are still being published to Twitter’s public social network.

Twitter also said it will begin testing a Clubhouse rival where users will join audio chat rooms.

These changes follow the activities by activist investor Elliott Management Group, which took a sizable stake in Twitter earlier this year, along with Silver Lake. The firms did so with a plan to push the company for more innovation and new executive leadership. The companies later struck a deal to spare Twitter CEO Jack Dorsey’s ousting, gain board seats, and put someone on the board with expertise in technology and artificial intelligence. Dorsey disagreed with the characterization that their involvement had any impact on product development.

Platforms

• Apple’s IDFA is targeted by EU privacy complaints. Apple had already told advertisers they’ll soon have to allow users the option to opt-out of ad tracking, but the new complaints are more about the fact that IDFA was ever created and stored in the first place, and that Apple’s planned changes don’t go far enough as they restrict its use for third parties, but not Apple itself.
• Apple’s Developer Transition Kits (DTKs) help developers get their apps ready for Apple’s silicon. But it turns out they won’t be able to install iOS or iPadOS apps like M1 Macs can.
• Google reminds Android developers they only have until January 18, 2021 to get approval to continue using background location data if they want to stay on Google Play.
• Apple releases a new version of iOS 14.2 for iPhone 12. The update appears to fix the iPhone 12 mini lock screen issue that caused some users’ lock screens to not respond to touches. The update also fixes issues with MMS messages, Made for iPhone hearing devices and more.
• Google also reminds Android developers that, starting Augut 2021, Google Play will require all apps to use the Android App Bundle publishing format and make other changes.
• Apple now allows developers to market and distribute their subscriptions with offer codes. These one-time, alphanumeric codes can be redeemed either on the App Store or within the app itself, allowing developers to acquire and retain customers or win back lapsed subscribers with special deals. Here are some tips on putting them to work.
• Apple’s iOS 14.3, beta 2 indicates that Apple will do away with the intermediate step of opening the Shortcuts app when app shortcuts are launched. This was one of the major pet peeves from the iOS 14 home screen customization trend, where users designed iOS themes using custom icons and widgets.

Services

Security & Privacy

• Dating app Bumble’s vulnerabilities puts Facebook Likes, locations and pictures of 95 million online daters at risk. Bumble took six months to fix the flaws and says no user data had been compromised.
• TikTok expands parental controls to include search, commenting and account privacy. The company launched Family Pairing in April, allowing parents to link their account to their teen’s in order to manage screen time, direct messaging and whether or not the teen’s account would be in “Restricted” mode — a special mode which limits TikTok’s feed to a safer set of more moderated content. This week, it also gave parents the ability to control whether the teen’s Liked Videos are visible to others, control who can comment on the teen’s videos and decide whether the teen is allowed to use TikTok search.
• Messaging app Go SMS Pro exposed millions of users’ private photos and files. The app, popular on Android, didn’t respond to security researchers about the problem. Typically, companies are given a 90-day deadline before vulnerabilities are made public.

Apps in the News

• Epic Games added video chat to Fortnite, via a Houseparty integration. The company bought the video chat app last year. Players use their phone or tablet as the webcam while they play on PCs, PS4 or PS5.
• Epic Games sues Apple in Australia too. The Fortnite maker is currently in a legal battle in the U.S. over Apple’s requirement to use Apple Pay and pay commissions on in-app purchases. In an interview this week, Epic Games founder Tim Sweeney likened the fight with Apple to a fight for civil rights. (That’s a bit much, we’d say.)
• Snap acquired Voisey, a U.K.-based app that lets users create music tracks and videos by overlaying their own vocals. The app had raise $1.88 million to date, but deal terms weren’t immediately available.

• Google Maps is updated with more COVID info and adds its Assistant driving mode. The COVID layer in Google Maps on Android and iOS can now show the number of all-time detected cases in an area, links to COVID resources from local governments and how busy transit lines are. The driving mode can read texts and lets you control your music from Maps.
• Facebook’s Messenger Kids redesigned to look more like Messenger. The updated app puts chats in a more traditional vertical list, with message and media previews, and bold text and blue dots to indicate their unread status. It also added a new tabbed navigation, which better highlights the separation between apps and games.
• YouTube launches 15-second audio ads aimed at users who listen to music or podcasts while the app plays in the background.
• Apple’s Shazam passes 200 million monthly active users.
• Instagram expands its Guides features and upgrades Search. Guides now allow creators to share tips, resources and other long-form content in a dedicated tab on their profiles. Now, everyone can make guides for Products, Places and Posts. Users can also now search by keywords, instead of just by names, usernames, hashtags and locations.
• Instagram also updates its Threads mobile messaging app. The app now adds a tab for easier navigation between stories and statuses. All users should also now have the tabbed inbox where they can see everyone’s stories, not just close friends, and have the option to publish to stories, not just close friends’ stories.
• Facebook sued an operator of Instagram clone websites. The operator had scraped Instagram data of some 100,000 accounts using its own 30,000 fake accounts that pretended to be humans to avoid detection.

• SoundCloud adds profile verification with official blue checks.
• App Growth Awards announce their finalists. 
• Google launches iOS 14 widgets for Gmail, Drive and Fit. Says Calendar and Chrome widgets will come soon.
• State and federal investigators are preparing to bring antitrust charges against Facebook over its acquisition of Instagram and WhatsApp, The Washington Post reports.
• Twitter and Facebook sat for another congressional tech hearing that again largely served to give lawmakers a chance to just talk about whatever they wanted, instead of the topic at hand: social media’s role during the election. The CEOs were asked about their apps’ addictiveness, their algorithms, their approaches to misinformation and more.

Deadpool

Trends

• U.S. mobile strategy game spending surges 22% to $2.8 billion in the first 10 months of 2020, Sensor Tower reports. The top game by player spending during this time was Clash of Clans, which generated close to $262 million in the U.S.
• Top home screen widget apps have reached 1 in 7 U.S. iPhones, another Sensor Tower report claims. The five most popular apps — Widgetsmith, Color Widgets, Photo Widget: Simple, WidgetBox and Photo Widget — have collectively seen 13 million iPhone installs since the launch of iOS 14. Globally, they’ve reached 45 million installs to date.

 

• Language learning app Duolingo confirms its raise of $35 million on a $2.4 billion valuation. The news was reported last week, but the numbers are now official. The app was valued at $1.65 billion earlier this year.
• Baidu to acquire Joyy’s Chinese live-streaming service YY for $3.6 billion. The search giant has been struggling to fight newcomers, like ByteDance, and video giant Kuaishou. Last year, Joyy’s YY took a $1.45 billion majority stake in Bigo, which operates streaming app Bigo Live and TikTok rival Likee.
• OpenPhone raises $14 million to replace outdated corporate phone systems with an app. Yammer founder David Sacks’ Craft Ventures led the round.
• Flipkart acquires AR startup Scapic to build an immersive shopping experience. Deal terms were undisclosed.
• Athlete social platform Strava raises $110 million in Series F financing from TCV and Sequoia Capital, with by Dragoneer Investment Group and existing investors including Madrone Capital Partners, Jackson Square Ventures and Go4it Capital.
• Yubo raises $47.5 million for its social app offering live-streaming rooms, now used by 40 million users. Existing investors Idinvest Partners, Iris Capital, Alven and Sweet Capital returned, and new investor Gaia Capital Partners joined.
• English learning app AllRight raises $5 million from Genesis Investments. The Ukraine startup combines real teachers with AI-powered tutors.
• ContextLogic, the maker of the mobile e-commerce app Wish, filed to go public. Wish saw revenues slow in 2019, but has grown more quickly in 2020. In the first nine months of 2019, Wish generated $1.33 billion in revenue compared with $1.75 billion during the same period in 2020, or up 32%.
• Roblox files for its IPO, noting it has lost $206 million on $589 million in revenue, has 31.1 million daily active users who now spend up to 22.2 billion hours in app, a figure up 122% year-over-year.

Amazon’s GameOn

Amazon this week launched GameOn for Android, an app that lets users record 30-second to five-minute long gameplay clips — including through a “Recall” feature that saves the clip after it happens. Clips are then shared the GameOn social network or elsewhere on social media. The app supports more than 1,000 games at launch, including PUBG Mobile, Crossy Road, Final Fantasy Brave Exvius and Angry Birds 2. A selfie camera lets gamers add their own commentary to the clips. Winners of weekly challenges get special profile badges. The launch follows Amazon’s release of its cloud gaming platform Luna.

Google Pay

Google Pay launched a major redesign of its app on Android and iOS this week with a ton of new features, including a mobile bank account. The company partnered with 11 banks, including Citi and Stanford Federal Credit Union, to launch Plex, a mobile banking service where accounts are held at partner banks but Google Pay operates as the front end. Plex users will have no monthly fees, overdraft charges or minimum balances and can pay both businesses and friends from their account. They can also explore offers and rewards to save money while shopping and get spending insights, including from their connected bank accounts outside the app. Another new feature makes it easier to split bills with friends, like restaurant checks, rent or utilities.

Moment’s RTRO app

RTRO, launched earlier this year, offers a way to record and share vintage-looking photos and video. This week, the app was updated with “Instant Film,” which lets you emulate instant film photos powered by the app’s “analog effects engine.” The resulting photos will give you the feel of a instant camera pic.

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DoorDash, Affirm, Roblox, Airbnb, C3.ai and Wish all filed to go public in recent days, which means some venture capitalists are having the best week of their lives.

Tech companies that go public capture our imagination because they are literal happy endings. An Initial Public Offering is the promised land for startup pilgrims who may wander the desert for years seeking product-market fit. After all, the “I” in “ISO” stands for “incentive.”

A flurry of new S-1s in a single week forced me to rearrange our editorial calendar, but I didn’t mind; our 360-degree coverage let some of the air out of various hype balloons and uncovered several unique angles.

For example: I was familiar with Affirm, the service that lets consumers finance purchases, but I had no idea Peloton accounted for 30% of its total revenue in the last quarter.

“What happens if Peloton puts on the brakes?” I asked Alex Wilhelm as I edited his breakdown of Affirm’s S-1. We decided to use that as the subhead for his analysis.

The stories that follow are an overview of Extra Crunch from the last five days. Full articles are only available to members, but you can use discount code ECFriday to save 20% off a one or two-year subscription. Details here.

Thank you very much for reading Extra Crunch this week; I hope you have a relaxing weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

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What is Roblox worth?

Gaming company Roblox filed to go public yesterday afternoon, so Alex Wilhelm brought out a scalpel and dissected its S-1. Using his patented mathmagic, he analyzed Roblox’s fundraising history and reported revenue to estimate where its valuation might land.

Noting that “the public markets appear to be even more risk-on than the private world in 2020,” Alex pegged the number at “just a hair under $10 billion.”

What China’s fintech can teach the world

For all the hype about new forms of payment, the way I transact hasn’t been radically transformed in recent years — even in tech-centric San Francisco.

Sure, I use NFC card readers to tap and pay and tipped a street musician using Venmo last weekend. But my landlord still demands paper checks and there’s a tattered “CASH ONLY” taped to the register at my closest coffee shop.

In China, it’s a different story: Alibaba’s employee cafeteria uses facial recognition and AI to determine which foods a worker has selected and who to charge. Many consumers there use the same app to pay for utility bills, movie tickets and hamburgers.

“Today, nobody except Chinese people outside of China uses Alipay or WeChat Pay to pay for anything,” says finance researcher Martin Chorzempa. “So that’s a big unexplored side that I think is going to come into a lot of geopolitical risks.”

Inside Affirm’s IPO filing: A look at its economics, profits and revenue concentration

Consumer lending service Affirm filed to go public on Wednesday evening, so Alex used Thursday’s column to unpack the company’s financials.

After reviewing Affirm’s profitability, revenue and the impact of COVID-19 on its bottom line, he asked (and answered) three questions:

• What does Affirm’s loss rate on consumer loans look like?
• Are its gross margins improving?
• What does the unicorn have to say about contribution profit from its loans business?

If you didn’t make $1B this week, you are not doing VC right

“The only thing more rare than a unicorn is an exited unicorn,” observes Managing Editor Danny Crichton, who looked back at Exitpalooza 2020 to answer “a simple question — who made the money?”

Covering each exit from the perspective of founders and investors, Danny makes it clear who’ll take home the largest slice of each pie. TL;DR? “Some really colossal winners among founders, and several venture firms walking home with billions of dollars in capital.

5 questions from Airbnb’s IPO filing

The S-1 Airbnb released at the start of the week provided insight into the home-rental platform’s core financials, but it also raised several questions about the company’s health and long-term viability, according to Alex Wilhelm:

• How far did Airbnb’s bookings fall during Q1 and Q2?
• How far have Airbnb’s bookings come back since?
• Did local, long-term stays save Airbnb?
• Has Airbnb ever really made money?
• Is the company wealthy despite the pandemic?

Autodesk CEO Andrew Anagnost explains the strategy behind acquiring Spacemaker

Earlier this week, Autodesk announced its purchase of Spacemaker, a Norwegian firm that develops AI-supported software for urban development.

TechCrunch reporter Steve O’Hear interviewed Autodesk CEO Andrew Anagnost to learn more about the acquisition and asked why Autodesk paid $240 million for Spacemaker’s 115-person team and IP — especially when there were other startups closer to its Bay Area HQ.

“They’ve built a real, practical, usable application that helps a segment of our population use machine learning to really create better outcomes in a critical area, which is urban redevelopment and development,” said Anagnost.

“So it’s totally aligned with what we’re trying to do.”

Unpacking the C3.ai IPO filing

On Monday, Alex dove into the IPO filing for enterprise artificial intelligence company C3.ai.

After poring over its ownership structure, service offerings and its last two years of revenue, he asks and answers the question: “is the business itself any damn good?”

Is the internet advertising economy about to implode?

In his new book, “Subprime Attention Crisis,” writer/researcher Tim Hwang attempts to answer a question I’ve wondered about for years: does advertising actually work?

Managing Editor Danny Crichton interviewed Hwang to learn more about his thesis that there are parallels between today’s ad industry and the subprime mortgage crisis that helped spur the Great Recession.

So, are online ads effective?

“I think the companies are very reticent to give up the data that would allow you to find a really definitive answer to that question,” says Hwang.

Will Zoom Apps be the next hot startup platform?

Even after much of the population has been vaccinated against COVID-19, we will still be using Zoom’s video-conferencing platform in great numbers.

That’s because Zoom isn’t just an app: it’s also a platform play for startups that add functionality using APIs, an SDK or chatbots that behave like smart assistants.

Enterprise reporter Ron Miller spoke to entrepreneurs and investors who are leveraging Zoom’s platform to build new applications with an eye on the future.

“By offering a platform to build applications that take advantage of the meeting software, it’s possible it could be a valuable new ecosystem for startups,” says Ron.

Will edtech empower or erase the need for higher education?

Without an on-campus experience, many students (and their parents) are wondering how much value there is in attending classes via a laptop in a dormitory.

Even worse: Declining enrollment is leading many institutions to eliminate majors and find other ways to cut costs, like furloughing staff and cutting athletic programs.

Edtech solutions could fill the gap, but there’s no real consensus in higher education over which tools work best. Many colleges and universities are using a number of “third-party solutions to keep operations afloat,” reports Natasha Mascarenhas.

“It’s a stress test that could lead to a reckoning among edtech startups.”

3 growth tactics that helped us surpass Noom and Weight Watchers

I look for guest-written Extra Crunch stories that will help other entrepreneurs be more successful, which is why I routinely turn down submissions that seem overly promotional.

However, Henrik Torstensson (CEO and co-founder of Lifesum) submitted a post about the techniques he’s used to scale his nutrition app over the last three years. “It’s a strategy any startup can use, regardless of size or budget,” he writes.

According to Sensor Tower, Lifesum is growing almost twice as fast as Noon and Weight Watchers, so putting his company at the center of the story made sense.

Send in reviews of your favorite books for TechCrunch!

Every year, we ask TechCrunch reporters, VCs and our Extra Crunch readers to recommend their favorite books.

Have you read a book this year that you want to recommend? Send an email with the title and a brief explanation of why you enjoyed it to bookclub@techcrunch.com.

We’ll compile the suggestions and publish the list as we get closer to the holidays. These books don’t have to be published this calendar year — any book you read this year qualifies.

Please share your submissions by November 30.

Dear Sophie: Can an H-1B co-founder own a Delaware C Corp?

Dear Sophie:

My VC partner and I are working with 50/50 co-founders on their startup — let’s call it “NewCo.” We’re exploring pre-seed terms.

One founder is on a green card and already works there. The other founder is from India and is working on an H-1B at a large tech company.

Can the H-1B co-founder lead this company? What’s the timing to get everything squared away? If we make the investment we want them to hit the ground running.

— Diligent in Daly City

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The coronavirus pandemic is acting as a catalyst for urban transformation across Europe as city authorities grapple with how to manage urban mobility without risking citizens’ health or inviting gridlock by letting cars flood in.

Micromobility and local commerce are being seen as both short and long-term solutions for urban revival in a number of cases. We’ve run down key policy developments in four major cities, Paris, Barcelona, London and Milan, which — at varying speeds — are pushing to rethink and reclaim streets for feet and two wheels.

Every year, around 2,500 people die prematurely because of air pollution in Paris. Like most European cities, the number one cause of pollution is motorized traffic.

Due to consistent policy changes over the past two decades, pollution has been slowly decreasing. It’s a long and difficult process and each step provides a new set of challenges.

The city has only had two different mayors for the past twenty years — Bertrand Delanoë and Anne Hidalgo. That consistency combined with long terms as mayor has led to some divisive changes and long-term thinking.

Paris has a long and conflictual relationship with cars. Nearly 20 years ago, bus lanes were highly controversial because it reduced space dedicated to cars. Today, nobody is asking for the removal of those lanes.

That’s why it’s a bit ironic that the same thing is happening again and again. For instance, Paris Mayor Anne Hidalgo banned cars from the right bank of the Seine in 2016. Many political opponents and car enthusiasts criticized the decision. Earlier this year, none of the candidate in the municipal election mentioned the right bank of the Seine — it became a non-issue.

But the city’s policies aren’t just focused on banning cars. Paris has become a mobility lab for European cities with many public and private initiatives. If they work in Paris, chances are those initiatives will be reproduced elsewhere.

There are two reasons why Paris is an interesting city for mobility experiments. First, the Paris area is the 29th metropolitan area in the world by population density. Georges-Eugène Haussmann initiated some radical urbanization changes in the second half of the 19th century leading to the city’s modern layout — mostly seven-story buildings circled by the ring road.

As the limits of the city haven’t changed in over 100 years, it is still relatively small compared to other major cities. For instance, San Francisco, which is a small city by American standards, is still larger than Paris when it comes to area.

Second, Paris attracts a lot of tourists (in a normal year). In 2019, 38 million tourists came to Paris. These tourists tend to do normal touristy things — they move around the city all day long.

Vélib’ as the epicenter of mobility changes

In addition to a dense public transportation network with subways, regional trains, buses and trams, other transportation methods have emerged. In 2005, the city of Lyon introduced Vélo’v, a publicly subsidized bike-sharing service based on a network of stations spread across the city.

Two years later, the city of Paris introduced a similar servie called Vélib’. It’s hard to overstate how big of an impact Vélib’ has had on transportation. Just a few years after its launch, Vélib’ had hundreds of thousands of subscribers generation over 100,000 rides per day.

Other cities in Europe and the U.S. have followed course and introduced their own bike-sharing service. But nobody has come close to reaching the success of Vélib’. Despite some growing pains, Vélib’ now has over 400,000 subscribers. On September 4th, 2020, the service handled 209,000 rides. There are around 15,000 bikes on the service, which means that each bike is used nearly 14 times per day.

The reason why Vélib’ is much more successful than Citi Bike in New York or Santander Cycles in London is that Vélib’ is much cheaper. A standard Vélib’ subscription with unlimited ride costs $3.70 per month (€3.10). In London, you pay nearly $10 per month (£90 per year). In New York, it costs $15 per month. Subscribing to Vélib’ is a no-brainer.

And this is all due to political will. Vélib’ is a subsidized service. But it’s hard to understand the financial impact of Vélib’ as there are fewer cars on the road, which means that it’s less expensive to maintain roads. Additionally, the impact on pollution and physical activity means that people tend to be healthier, which reduces the pressure on the public health system.

Bike-sharing services can’t work without public money as it fosters network density, which boosts usage. Once the network reaches a critical mass, it’s a never-ending virtuous circle of network expansion and new clients.

Micromobility’s key battleground

Many startups have tried to enter the lucrative market with their own take on bike-sharing without docks. Gobee.bike, Obike, Ofo, Mobike and more recently Bolt have all deployed thousands of bikes in the streets of Paris. They’ve all shut down since then. Jump, which is now a Lime subsidiary, is the only remaining contender.

But bikes are just one transportation method among what people call ‘soft mobility’ in France. A French startup called Cityscoot has also been thriving with tens of thousands of rides per day. The company operating free-floating electric moped scooter service.

And then, there are scooters. At some point, there were just too many scooter startups — Bird, Bolt, Bolt by Usain Bolt, Circ, Dott, Hive, Jump, Lime, Tier, Voi, Ufo and Wind. They all had funny-sounding names and there were even two different companies with the same name (Bolt). And I’m probably forgetting a couple of companies.

This shows once again that Paris is an attractive city for micromobility startups. There are many tourists and you can go from A to B quite easily.

The city of Paris had to regulate the market because scooters were taking over urban space. There are now three permits to operate shared electric scooters in Paris — Dott, Lime and Tier. They each operate a fleet of 5,000 scooters and there are now dedicated parking spots.

The 15-minute city

Up next, Paris Mayor Anne Hidalgo has some ambitious plans to accelerate the pace of changes. During her reelection campaign earlier this year, she laid out a clear multiyear plan with a key concept: the 15-minute city.

“The 15-minute city represents the possibility of a decentralized city. At its heart is the concept of mixing urban social functions to create a vibrant vicinity,” Carlos Moreno, a professor at University of Paris 1, told Bloomberg.

Essentially, Moreno believes that there shouldn’t be residential neighbourhoods, business districts and commercial areas. Each neighbourhood should be a tiny town on its own with workplaces, stores, movie theaters, health centers, schools, bakeries, etc.

In addition to reducing carbon emissions, the 15-minute concept has the potential of revitalizing neighbourhoods altogether. By prioritizing social functions, roads immediately become an afterthought.

The 15-minute city is a concept that sums up a lot of things in three words. Suddenly, there’s a clear political agenda with a strong brand for the next decade of urban planning.

If I paraphrase neoliberal ideology, many policies trickle down from the 15-minute city. Car ownership is relatively low in Paris — more than 60% of households don’t have a car. Even more striking, people going to work use their car extremely rarely — in 9.5% of cases.

There are two consequences. First, cars are no longer the priority. In 2024, you won’t be able to drive a diesel car in Paris. In 2030, gas-powered cars will be banned.

Some major roads are now primarily focused on ‘soft mobility’. Due to the coronavirus outbreak, the city of Paris took advantage of the lockdown to accelerate their mobility agenda with new bike lanes and repurposed roads. It feels like they’re copying the neoliberal shock doctrine, as explained by Naomi Klein. And yet, in that case, it feels like a reverse shock doctrine as the administration is focusing on green initiatives.

For instance, the Rue de Rivoli used to be a major road that connects the Champs-Elysées to Bastille. Now, one-third of the road is dedicated to buses and two-thirds are reserved for bikes and e-scooters.

Second, the City of Paris wants to reclaim space. Cars in Paris remain parked 95% of the time. That’s why Paris is going to remove 50% of parking spots. Instead, the city of Paris wants to turn some streets into gardens. There are bigger plans for new parks as well in front of the city hall and between the Eiffel Tower and Trocadéro.

After decades of incremental changes, everything is lining up for a drastic transition. In Paris, change happens progressively, then suddenly.

The Catalan capital — Spain’s second largest city — approved a new Urban Mobility Plan in 2013 with the aim of flipping street space in favor of pedestrians and away from prioritizing private vehicles. The city has the highest vehicle density in Europe and that’s a major problem.

City authorities report vehicle density at around 6,000 per square kilometer — highlighting the deleterious impact on air quality and public health. Per official stats, traffic pollution causes 3,500 premature deaths annually, 1,800 hospital admissions for cardiorespiratory problems, 5,100 cases of bronchitis in adults, 31,100 cases in children and 54,000 asthma attacks in children and adults.

The city’s solution to this public health crisis is an ambitious pedestrianization plan focused, in recent years, on creating ‘superilles’ — also known as ‘super islands’ or ‘superblocks’ — which switch the function of a number of streets from carrying cars to putting neighbourhood life first.

A handful of superblocks have been established over the years. Some, such as one in the Gracia barrio, is already so well established it’s all but invisible to the eye unless you stop to ask yourself how come there are so many pedestrians out and about and the cars that pass have to creep along behind them? Or why the edge of the pavement blends seamlessly into the road with no change of level.

But Barcelona is now planning a major expansion of the policy, championed by mayor Ada Colau, that will see it transform the dense, central Eixample district — creating masses more green (and low speed) urban space over the next ten years. They’re dubbing this the Barcelona superblock, given its central location and the larger scale vs what’s come before.

The superblocks model is naturally suited to micromobility — and building out the city’s network of bike lanes is a key part of the urban mobility plan.

Barcelona has had a red-liveried docked bike rental scheme — called Bicing — since 2007. Recently upgraded to include e-bikes alongside mechanical rides, the scheme isn’t yet as heavily used as its equivalent in Paris (and isn’t open to tourists as the subscription requires a local ID to obtain) but it is very popular with residents.

Per official data, Bicing had more than 127,000 subscribers as of September 2020 who racked up around 1.3 million journeys in the month.

In recent years e-scooter ownership has also mushroomed, with no specific legislation preventing private use on public roads, though rental companies have faced regulatory controls. Not that that’s prevented plenty of scooter startups — from Bird to Bolt to Wind — from scooter-bombing the city seeking to workaround restrictions.

As well as boosting biking and micromobility, the superblocks plan also aims to boost local commerce as streets flip from being ‘for cars’ to greener and more pleasant spaces where people are encouraged to meet, gather and do business.

In other traffic control policy measures, Barcelona began applying restrictions to vehicles based on their emissions at the start of this year — banning older petrol and diesel cars from entering during peak times. (The policy will apply to delivery transportation from next year.) While residents who own polluting vehicles have been encouraged to give up their cars in exchange for a free three-year public transit card (nudging people toward the existing metro, train and bus network).

Righting a historical wrong

With the superblocks transformation, there’s a historical architectural challenge that Barcelona’s urban planners are aiming to overcome.

The grid structure of the central Eixample district — conceived in 1856 by Catalan civil engineer, Illdefons Cerdà — aimed to extend the growing city in a healthy way by allowing for green space within every housing block.

However, the plan was implemented with a lack of regulation that allowed infill by developers and speculators over time, fuelled by rising land values and housing prices. That gobbled up gaps in the blocks intended as open public spaces. The result is a far denser city than Cerdà had planned. And one with streets that — so long as they remain packed with petrol and diesel vehicles — are noisy, polluted and unpleasant places to hang around in.

The Barcelona superblock is thus an attempt to right a historical wrong in the implementation of the city’s urban planning. Or “to modernize the Barcelona of the late nineteenth century and achieve better conditions for public health,” as city authorities put it.

It’s also a cautionary story about the need for proper regulation to accompany urban planning to ensure it serves the public interest — to protect residents’ health, quality of life and local commerce — guarding against deleterious external forces powered by private economic interests.

Around a third of Eixample’s 61 streets will be flipped to make way for a “green axes” of pedestrianized carriageway by 2030, under the Barcelona superblock plan. It will also create 21 new public squares at diagonal intersections.

The transformation of the zone will be slow, with city authorities wanting to make sure they bring residents along with them. But they have data to champion the plan — drawing on the success of a handful of existing superblocks, such as one in the Poblenou district — and can point to examples such as a third less NO2 pollution at one of the flipped interchanges and a similar increase in street level commercial activity.

The detail of the new street model has not yet been determined — the city is holding a design competition to choose that next year — but it’s set key parameters such as the need for 80% of the street to be shaded by trees/vegetation in summer, and at least 20% of its surface to be permeable rather than paved.

“It will be necessary to generate walking spaces, spaces that facilitate spontaneous children’s play and comfortable living spaces,” it writes in a press release [translated from Catalan]. “The design will have to allow for flexible spaces that can accommodate various occasional uses such as fairs, concerts and other acts. All with a feminist vision, prioritizing children and the elderly and promoting services and local trade.”

City authorities describe the aim as “a more sustainable model of public space, healthy and designed for people” — and one which “promotes social relations, which encourages local trade and focuses on the needs of children and seniors.”

They have also committed to maintain access to public transport throughout the superblocks.

Work on converting the first four streets is slated to begin in the first quarter of 2022: In Consell de Cent, Girona, Rocafort and Comte Borrell. City authorities have committed $44.8 million (€37.8 million) to these first transformations — though clearly a lot more public funding will be needed to deliver the full switch.

The coronavirus pandemic has acted as a small-scale opportunity for accelerating pedestrian-focused urban remodeling — enabling city authorities to expand Barcelona’s network of bike lanes during the relative quiet of lockdowns, and install some emergency pedestrian zones to expand outdoor space as an anti-COVID-19 measure.

Some street parking around the city has also been requisitioned and repurposed to make outdoor terrace space for cafés and bars during the pandemic.

But the need to reset an urban infrastructure that’s unhealthily monopolized by motorized traffic is an issue the city has been grappling with for decades — slowly chipping away at the problem with a variety of policies, such as those that allow for temporary road closures for local events and at weekends.

So, for many Barcelona residents, it’s not controversial to say that creating healthy, commercially active urban spaces means cars giving way to foot traffic. And the 2030 ‘Barcelona superblock’ looks like it will tip the balance for good.

That said, criticism of the project includes that it’s not radical enough — leaving a number of high-speed thoroughfares to keep on slicing right through the heart of the city. So Barcelona’s creep away from cars doesn’t yet look as radical as what’s being planned in Paris.

The UK capital has operated congestion charging in central zones of the city since 2003 — charging motorists to drive into the area in a bid to reduce road use during the busiest times. The policy made London a major European pioneer in applying controls on urban car use.

However, a lack of public and political consensus on the issue has restricted policy development for long periods — and even led to a rolling back, at the end of 2010, when then London mayor, Boris Johnson, scrapped a portion of the zone known as the western extension.

London’s huge population and sprawling size — with commercial zones tending to be clustered and concentrated away from large swathes of residential housing (which are often segregated by income) — means the issue of how to get around can be a divisive one, for people and businesses. So, it’s not an obvious candidate for going ‘car free’.

Yet, at the same time, London is extremely well served with public transport (buses, subways, trams and trains) — meaning plenty of journeys can be made without owning or using a private vehicle. There has also been investment in expanding the city’s network of cycle lanes in recent decades. And since 2010 a pay-as-you-go docked bike rental scheme has been in operation — racking up more than 10 million trips in total as of 2017.

Though, again, car-clogged streets and a Northern European climate can put limits on people’s willingness to brave the elements on two wheels.

Existing UK regulations have also held back the uptake of modern alternatives like e-scooters — though there are now moves to open up streets to this type of micromobility, with the city’s transport regulator preparing a trial for scooter rental companies.

While a lack of decisive political action to curb car use has undoubtedly contributed to decades of terrible air quality in London — with drastic impacts on public health (one study in 2015 suggested deaths from long term exposed to pollution could be as high as 9,500 annually) — rising awareness of the health risks associated with urban traffic has led city authorities to push policies that aim to deter the most polluting vehicles from driving through the congestion zone by applying a surcharge, which appears to have led to a decline in peak pollution levels.

London’s ‘ultra-low emission zone’ (Ulez) will be expanded to cover a larger area of the city next year. So, there’s been a centralized and somewhat sustained push to make urban car use cleaner and less harmful, even though there’s been an inconsistent approach to discouraging car use itself.

But, in a more radical recent development, the shock of the coronavirus has fuelled grassroots campaigns at a borough/neighbourhood level to bar through-traffic in residential neighbourhoods.

This is done by implementing so-called low traffic neighbourhoods (LTNs) which use a variety of interventions to limit traffic — such as strategically placed planters or bollards and/or timed road use restrictions to block rat runs.

Residents in a number of London boroughs who are sick of living alongside the noise and pollution generated by traffic have seized on the opportunity of COVID-19-related mobility restrictions to restrict access to roads in their immediate vicinity to through traffic.

Per Bloomberg, there were 114 plans for LTNs in the works in London as of late July.

There’s push and pull here too, with LTNs generating opposition, including complaints that rat-running cars are simply being displaced to other streets.

There are also important socioeconomic critiques that they disproportionately benefit wealthier areas at the expense of more deprived neighbourhoods.

Such opposition may in part reflect the relative rapidness of implementation since the pandemic — something a more participatory process and well-rounded monitoring and consultation might be able to avoid.

But for those lucky to be living in LTNs the gains look hard to ignore. “Now, instead of speeding cars, the streets carry street chalk, murals, flowers, and signs with children’s illustrations asking people to step out of their car and explore the neighborhood,” Bloomberg reports on the changed character of street life in one LTN.

In May, London’s mayor, Sadiq Khan — who has pledged to make London carbon neutral by 2030 if he’s reelected next year — announced a ‘Streetspace’ plan: Pushing a range of policies aimed at “rapidly transforming London’s streets to accommodate a possible 10x increase in cycling and 5x increase in walking.”

The plan also explicitly encourages scooting alongside walking and cycling as an urban mobility priority in London.

Part of the motivation for the policy push has been trying to steer Londoners away from a mass regressive switch away from London’s public transport — and into cars — as lockdown restrictions ease yet the risk of COVID-19 infection lingers.

Khan’s Streetspace plan also voices support for LTNs. But, ultimately, the power to restrict London traffic rests with local councils (or central government) — leaving the mayor to “urge” government/borough councils to get on board with measures aimed at persuading Londoners to switch to “cleaner, more sustainable forms of transport”.

The lack of a central London authority with a policy plan for LTNs may limit how far or fast these through-traffic-free neighbourhoods can spread in the UK capital.

Nonetheless it’s an interesting development that shows how much appetite there is among Londoners to reclaim residential streets for neighbourhood life.

Italy’s industrial north was among the hardest hit regions in Europe during the first wave of the coronavirus pandemic. An extended lockdown was implemented — clearing cars off the streets of cities like Milan for months, as businesses got shuttered and residents were confined indoors — which in turn led to a noticeable improvement in air quality in a region infamous for pollution.

Since then, authorities in Milan have seized on the enforced break with a smog-filled ‘norm’ to push forward with an experimental citywide expansion of cycling lanes and pedestrianized zones — under a mobility plan called Strade Aperte (aka Open Streets) that’s aimed at adapting city infrastructure to find space for social distancing as urban life gets opened back up.

The Open Streets plan includes dropping the speed limit to 30kmph on a majority of Milan’s roads (replacing a 50kmph maximum), via signage and incorporating some structural elements for speed control; and adding 35km to its existing bike network before the end of the year.

The city launched its docked bike rental scheme, BikeMI, in 2008.

“As the Milan 2020 Adaptation Strategy foresees, the current health crisis can be an opportunity to decide to give more space to people and improve the environmental conditions in the city, increasing more sustainable, non-polluting, means of travel and redefining the use of streets and public spaces for commercial, recreational, cultural, and sport purposes, while respecting physical distance requirements,” city authorities write in a memo on the plan.

The overarching policy push is toward the same goal as Paris’ vision: Supporting what’s described as “the neighbourhood dimension” — aka making sure every citizen has access to almost all services within 15 minutes’ walk.

This is a strategic aim while residents are forced to live alongside the virus — and some of the measures are being couched as ‘temporary’.

But while the pandemic is acting as a catalyst/justification for rapid changes, city authorities were already looking for ways to repurpose urban infrastructure to deliver health benefits to citizens, environmental gains and boost local commerce by getting people out of cars and peddling/walking through the neighbourhood.

So, it’s hard to see where the impetus would come from to advocate a reversal back to noisier, more polluted, less playful streets.

In Milan, it’s the same story: The direction of urban travel is about rethinking streets as open public spaces for people and hyper-local micromobility, rather than letting cars colonize the commons and render its roads default highways elsewhere. Addio macchina.

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Affirm, a consumer finance business founded by PayPal mafia member Max Levchin, filed to go public this afternoon.

The company’s financial results show that Affirm, which doles out personalized loans on an installment basis to consumers at the point of sale, has an enticing combination of rapidly expanding revenues and slimming losses.

Growth and a path to profitability has been a winning duo in 2020 as a number of unicorns with similar metrics have seen strong pricing in their debuts, and winsome early trading. Affirm joins DoorDash and Airbnb in pursuing an exit before 2020 comes to a close.

Let’s get a scratch at its financial results, and what made those numbers possible.

Affirm’s financials

Affirm recorded impressive historical revenue growth. In its 2019 fiscal year, Affirm booked revenues of $264.4 million. Fast forward one year and Affirm managed top line of $509.5 million in fiscal 2020, up 93% from the year-ago period. Affirm’s fiscal year starts on July 1, a pattern that allows the consumer finance company to fully capture the U.S. end-of-year holiday season in its figures.

The San Francisco-based company’s losses have also narrowed over time. In its 2019 fiscal year, Affirm lost $120.5 million on a fully-loaded basis (GAAP). That loss slightly fell to $112.6 million in fiscal 2020.

More recently, in its first quarter ending September 30, 2020, Affirm kept up its pattern of rising revenues and falling losses. In that three-month period, Affirm’s revenue totaled $174.0 million, up 98% compared to the year-ago quarter. That pace of expansion is faster than the company managed in its most recent full fiscal year.

Accelerating revenue growth with slimming losses is investor catnip; Affirm has likely enjoyed a healthy tailwind in 2020 thanks to the COVID-19 pandemic boosting ecommerce, and thus gave the unicorn more purchase in the realm of consumer spend.

Again, comparing the company’s most recent quarter to its year-ago analog, Affirm’s net losses dipped to just $15.3 million, down from $30.8 million.

Affirm’s financials on a quarterly basis — located on page 107 of its S-1 if you want to follow along — give us a more granular understanding of how the fintech company performed amidst the global pandemic. After an enormous fourth quarter in calendar year 2019, growing its revenues to $130.0 million from $87.9 million in the previous quarter, Affirm managed to keep growing in the first, second, and third calendar quarters of 2020. In those periods, the consumer fintech unicorn recorded a top line of $138.2 million, $153.3 million, and $174 million, as we saw before.

Perhaps best of all, the firm turned a profit of $34.8 million in the quarter ending June 30, 2020. That one-time profit, along with its slim losses in its most recent period make Affirm appear to be a company that won’t hurt for future net income, provided that it can keep growing as efficiently as it has recently.

The COVID-19 angle

The pandemic has had more impact on Affirm than its raw revenue figures can detail. Luckily its S-1 filing has more notes on how the company adapted and thrived during this Black Swan year.

Certain sectors provided the company with fertile ground for its loan service. Affirm said that it saw an increase in revenue from merchants focused on home-fitness equipment, office products, and home furnishings during the pandemic. For example, its top merchant partner, Peloton, represented approximately 28% of its total revenue for the 2020 fiscal year, and 30% of its total revenue for the three months ending September 30, 2020.

Peloton is a success story in 2020, seeing its share price rise sharply as its growth accelerated across an uptick in digital fitness.

Investors, while likely content to cheer Affirm’s rapid growth, may cast a gimlet eye at the company’s dependence for such a large percentage of its revenue from a single customer; especially one that is enjoying its own pandemic-boost. If its top merchant partner losses momentum, Affirm will feel the repercussions, fast.

Regardless, Affirm’s model is resonating with customers. We can see that in its gross merchandise volume, or total dollar amount of all transactions that it processes.

GMV at the startup has grown considerably year-over-year, as you likely expected given its rapid revenue growth. On page 22 of its S-1, Affirm indicates that in its 2019 fiscal year, GMV reached $2.62 billion, which scaled to $4.64 billion in 2020.

Akin to the company’s revenue growth, its GMV did not grow by quite 100% on a year-over-year basis. What made that growth possible? Reaching new customers. As of September 30, 2020, Affirm has more than 3.88 million “active customers,” which the company defines as a “consumer who engages in at least one transaction on our platform during the 12 months prior to the measurement date.” That figure is up from 2.38 million in the September 30, 2019 quarter.

The growth is nice by itself, but Affirm customers are also becoming more active over time, which provides a modest compounding effect. In its most recent quarters, active customers executed an average of 2.2 transactions, up from 2.0 in third quarter of calendar 2019.

Also powering Affirm has been an ocean of private capital. For Affirm, having access to cash is not quite the same as a strictly-software company, as it deals with debt, which likely gives the company a slightly higher predilection for cash than other startups of similar size.

Luckily for Affirm, it has been richly funded throughout its life as a private company. The fintech unicorn has raised funds well in excess of $1 billion before its IPO, including a $500 million Series G in September of 2020, a $300 million Series F in April of 2019, and a $200 million Series E in December of 2017. Affirm also raised more than $400 million in earlier equity rounds, and a $100 million debt line in late 2016.

What to make of the filing? Our first-read take is that Affirm is coming out of the private markets as a healthier business than the average unicorn. Sure, it has a history of operating losses and not yet proven its ability to turn a sustainable profit, but its accelerating revenue growth is promising, as are its falling losses.

More tomorrow, with fresh eyes.

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