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InReach Ventures, the ‘AI-powered’ European VC, closes new €53M fund – TechCrunch

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InReach Ventures, the ‘AI-powered’ European VC, closes new €53M fund – TechCrunch

InReach Ventures, the so-called “AI-powered” venture capital firm based in London, is announcing the first closing of a new €53 million fund targeting early-stage European technology companies — surpassing the original fund target of €50 million, apparently.

Founded by former Balderton Capital General Partner Roberto Bonanzinga, along with Ben Smith (former U.K. Engineering Director at Yammer) and John Mesrie (former General Counsel at Balderton Capital), InReach set out in 2015 to use technology to help scale VC, especially across Europe’s idiosyncratic and highly fragmented market.

The firm’s proprietary software-based approach, which is underpinned by machine learning, claims to be able to generate and evaluate deal-flow more efficiently than traditional venture firms that mostly employ human VCs alone — although, admittedly, practically every VC firm is underpinned by some eliminate of data science and/or technology these days. Berlin’s Fly VC is another machine learning-enabled early-stage VC that comes to mind.

However, InReach certainly appears to be putting its money where its mouth is, disclosing that it has invested over €3 million in the development of its software, codenamed “DIG”. To back this up, Bonanzinga tells me the firm employs “more software engineers than investors”. (I saw an early demo of the software a couple of years ago and even then it seemed legit.)

Regards the new fund, Bonanzinga says InReach is targeting the most promising and innovative startups across Europe, primarily in the areas of consumer internet, software as a service and marketplaces. “We are geographically agnostic and will invest in companies anywhere in Europe, from Helsinki to Barcelona, from Warsaw to Rome,” he says. “In most cases we will be the first institutional investors and our first cheques will be between €500,000 and €2 million”.

To date, InReach Ventures has invested in eight startups from across Europe. They include Oberlo (Lithuania), which was subsequently acquired by Shopify, Soldo (Italy/UK), Tutorful (U.K.), Shapr3D (Hungary), Traitly (Sweden) and Loot (Germany).

Below follows a lightly edited Q&A with Bonanzinga on the new fund, how AI can be used to scale venture capital, and why machines won’t put VCs out of a job entirely any time soon.

TC: You have often said that venture capital doesn’t scale, especially across a fragmented market like Europe, but what do you mean by this?

RB: People get very excited about ecosystems but the data shows that startups can come from anywhere; the big technology hubs or more remote locations. This is carried through to Europe’s largest exists: from Betfair in London to Zalando in Berlin, from Supercell and Spotify in the Nordics, to Critio in France and Yoox in Italy, and so on. So not only is deal sourcing fragmented across Europe, but so are the returns.

Traditional ventures firms have looked to manage this fragmentation by throwing people at the problem, but if you want true coverage you need to have a presence in every city in Europe. This is how you need to think of our technology platform, as like having a highly trained associate in every city and town across the whole of Europe, providing structured diligent deal-flow. With this data/technology driven approach we can be truly pan-European at the early-stage, even as the first institutional investor on the cap-table.

TC: A lot of VCs say they use technology to help find or manage deal-flow, how is InReach any different?

RB: Many venture firms talk about data and software. Lately, it has become a hot topic in pitches to limited partners. I predict a new hype: the rush of needing to check the box of “we have a data strategy”. We will have many firms with 30+ investment professionals and a data engineer in a corner. The real question is how many firms are willing to transform their professional service DNA into a product DNA? As always, this is more of a people/organisational question, rather than a question simply of the use of technology.

Take a look at InReach, we are a very atypical founding team for a venture firm. In particular, Ben Smith comes from a software engineering background and has built many data platforms and product development teams (most recently at Yammer/Microsoft). The majority of the people at InReach are software engineers. This is the only Venture Firm we know in which there are more software engineers than investors! So far we have invested over €3m in developing our proprietary technology platform.

TC: Without giving away your secret sauce, how does the InReach platform work, both in terms of the machine learning/feedback loop or the signals/data you plug into it?

RB: From a technology perspective, our logical architecture is primarily based on 3 distinct layers: data, intelligence, and workflow. The data layer is a mix of massive data aggregation, with deep data enhancement, including the generation of a large set of original data. The intelligence layer makes sense of these millions of data points through an ensemble of machine learning algorithms, ranging in complexity from simple rules to advanced networks. Given this data-driven approach and the significant deal-flow this generates, we invest heavily in building a workflow product which allows us to efficiently process thousands of companies each month.

TC: You say the final investment decision is still made by humans: why is that and do you think this will always be the case?

RB: As with any AI company, it’s all about data. We have spent the past 3 years aggregating data from across the internet and building algorithms to provide us with significant dealflow. Much more crucially, we have been collecting and generating our own proprietary data-set of investment decisions and how these startups grow and adapt over time. Clearly this will only get more powerful.

However, especially at this early-stage, so much of the investment decision is based on the founders and what we call the DNA fit of the founders and the problem they are trying to solve. Some of this can be encoded in algorithms and learnt by AI, but there are still intangibles that ultimately require that we ask the question: do we enjoy spending time together?

RB: What has been the reaction by under the radar founders when they are discovered really early via InReach’s software?

RB: The first question is always ‘How did you find out about us?’. Once we explain what we do and how the platform works we create an immediate connection with the entrepreneur. This is exactly what happened when we reached out to 5 entrepreneurs in Vilnius who had started a company called Oberlo. Over the following year, we helped them grow and expand to 30 people across both Vilnius and Berlin, prior to their acquisition by Shopify.

We are taking a very entrepreneurial approach to investing; we run InReach more as a product development organisation, rather than a professional services firm, so we look and feel native to the entrepreneurs we talk to. We try to share our experiences and current-best-practices through the company building process, whether it be OKRs, different agile development methodologies, product roadmaps, etc.

Reaching out to promising entrepreneurs early is not the only advantage that DIG gives us. We are also very efficient and responsive when analysing inbound opportunities. In fact, if you look at our website, we optimize our website to convert visitors to share their startup with us. We are not concerned with being bombarded by opportunities because we have developed a scalable workflow that allows us to efficiently manage significant dealflow.

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Netflix cancels ‘Jessica Jones’ and ‘The Punisher,’ its last Marvel shows – TechCrunch

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Netflix cancels ‘Jessica Jones’ and ‘The Punisher,’ its last Marvel shows – TechCrunch

Netflix is no longer in the Marvel superhero business, with the cancellation of “Jessica Jones” and “The Punisher.”

The writing has been on the wall since last fall, when the streaming service canceled its other three Marvel shows — “Iron Fist,” “Luke Cage” and “Daredevil.” Plus, showrunner Melissa Rosenberg was already announced to leave “Jessica Jones” after the upcoming third season.

There have been conflicting reports about which company ultimately decided to pull the plug, but this does seem to be part of a broader corporate rift, with Disney ending its overall deal with Netflix and producing Marvel shows for its yet-to-launch streaming service.

Disney has also announced a slate of animated Marvel series on Hulu (where Disney will become the majority owner, post-Fox acquisition), following a similar structure to the Netflix shows — four separate series followed by a big crossover.

Netflix, meanwhile, just released the first season of “The Umbrella Academy,” an offbeat superhero series based on the comics by Gerard Way and Gabriel Bá.

In a statement, Netflix said:

Marvel’s The Punisher will not return for a third season on Netflix. Showrunner Steve Lightfoot, the terrific crew, and exceptional cast including star Jon Bernthal, delivered an acclaimed and compelling series for fans, and we are proud to showcase their work on Netflix for years to come.

In addition, in reviewing our Marvel programming, we have decided that the upcoming third season will also be the final season for Marvel’s Jessica Jones . We are grateful to showrunner Melissa Rosenberg, star Krysten Ritter and the entire cast and crew, for three incredible seasons of this groundbreaking series, which was recognized by the Peabody Awards among many others. We are grateful to Marvel for five years of our fruitful partnership and thank the passionate fans who have followed these series from the beginning.

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Google Assistant Actions up 2.5x in 2018 to reach 4,253 in the US – TechCrunch

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Google Assistant Actions up 2.5x in 2018 to reach 4,253 in the US – TechCrunch

In addition to competing for smart speaker market share, Google and Amazon are also competing for developer mindshare in the voice app ecosystem. On this front, Amazon has soared ahead — the number of available voice skills for Alexa devices has grown to top 80,000 the company recently announced. According to a new third-party analysis from Voicebot, Google is trailing that by a wide margin with its own voice apps, called Google Assistant Actions, which total 4,253 in the U.S. as of January 2019.

For comparison, 56,750 of Amazon Alexa’s total 80,000 skills are offered in the U.S.

The report notes that the number of Google Assistant Actions have grown 2.5 times over the past year — which is slightly faster growth than seen on Amazon Alexa, whose skill count grew 2.2 times during the same period. But the total is a much smaller number, so growth percentages may not be as relevant here.

In January 2018, there were 1,719 total Google Assistant Actions in the U.S., the report said. In 2017, the number was in the low hundreds in the beginning of the year, and reached 724 by October 2017.

Voicebot also examined which categories of voice apps were popular on Google Assistant platforms.

It found that three of the 18 categories accounted for more than one-third of all Google Assistant Actions: Education & Reference; Games & Fun; and Kids & Family.

The Education category topped the list with more than 15 percent of all Actions, while Games & Fun was 11.07 percent and Kids & Family was 9.29 percent.

Local and Weather were the least popular.

On Alexa, the top categories differ slightly. Though Games & Fun is popular on Google, its Alexa equivalent — Games & Trivia — is the No. 1 most popular category, accounting for 21 percent of all skills. Education was second most popular at around 14 percent.

It’s interesting that these two top drivers for voice apps are reversed on the two platforms.

That could indicate that Alexa is seen to be the more “fun” platform, or one that’s more oriented toward use by families and gaming. Amazon certainly became aware of the trend toward voice gaming, and fanned the flames by making games the first category it paid developers to work on by way of direct payments. That likely encouraged more developers to enter the space, and subsequently helped boost the number of games — and types of gaming experiences — available for Alexa.

Voicebot’s report rightly raises the question as to whether or not the raw skill count even matters, though.

After all, many of the Alexa skills offered today are of low quality, or more experimental attempts from developers testing out the platform. Others are just fairly basic — the voice app equivalent of third-party flashlight apps for iPhone before Apple built that feature into iOS. For example, there now are a handful of skills that turn on the light on Echo speakers so you can have a nightlight by way of the speaker’s blue ring.

But even if these early efforts sometimes fall short, it does matter that Alexa is the platform developers are thinking about, as it’s an indication of platform commitment and an investment on developers’ part. Google, on the other hand, is powering a lot of its Assistant’s capabilities itself, leaning heavily on its Knowledge Base to answer users’ questions, while also leveraging its ability to integrate with Google’s larger suite of apps and services, as well as its other platforms, like Android.

In time, Google Assistant may challenge Alexa further by capitalizing on geographic expansions, but for the time being, Alexa is ahead on smart speakers as well as, it now seems, on content.

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Amazon’s Echo Wall Clock is back on sale after connectivity fix

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The Echo Wall Clock was first announced by Amazon in September and started shipping just before the holidays in December. Just over a month after the clock was first made available to buy, Amazon decided to pull it because of problems with Bluetooth connectivity. That feature is essential to the device’s function, as it needs to connect to another Echo device in order to operate with voice controls. With the fix, users will once again be able to set alarms and timers via Alexa that will be displayed on the 60 LED lights around the edge of the clock’s face.

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