Domio just raised $12 million in Series A funding to build “apart hotels” across the U.S.

Hotels can be pricey, and and travelers are often forced to leave their rooms for basic things, like food that doesn’t come from the minibar. Yet Airbnb accommodations, which have become the go-to alternative for travelers, can be highly inconsistent.

Domio, a two-year-old, New York-based outfit, thinks there’s a third way: apartment hotels, or “apart hotels,” as the company is calling them.

The idea is to build a brand that travelers recognize as upscale yet affordable, more tech friendly than boutique hotels, and features plenty of square footage, which it expects will appeal to both families as well as companies that send teams of employees to cities and want to do it more economically.

Domio has a host of competitors, if you’ll forgive the pun. Marriott International earlier this year introduced a branded home-sharing business called Tribute Portfolio Homes wherein it says it vets, outfits and maintains homes of its choosing to hotel standards. And Marriott is among a growing number of hotels to recognize that customers who stay in a hotel for a business trip or a family vacation might prefer a multi-bedroom apartment with hotel-like amenities.

Property management companies have been raising funding left and right for the same reason. Among them: Sonder, a four-year-old, San Francisco-based startup offering “spaces built for travel and life” that, according to Crunchbase, has raised $135 million from investors, much of it this year; TurnKey, a six-year-old, Austin, Tex.-based home rental management company that has raised $72 million from investors, including via a Series D round that closed back in March; and Vacasa, a nine-year-old, Portland, Ore.-based vacation rental management company that manages more than 10,000 properties and which just this week closed on $64 million in fresh financing that brings its total funding to $207.5 million.

That’s saying nothing of Airbnb itself, which has begun opening hotel-like branded apartment complexes that lease units to both long-term renters and short-term visitors in partnership with development partner Niido.

Whether Domio can stand out from competitors remains to be seen, but investors are happy to provide give it the financing to try. The company is today announcing that it has raised $12 million in Series A equity funding led by Tribeca Venture Partners, with participation from SoftBank Capital NY and Loric Ventures. The round comes on the heels of Domio announcing a $50 million joint venture last month with the private equity firm Upper 90 to exclusively fund the leasing and operations of as many as 25 apartment-style hotels for group travelers.

Indeed, Domio thinks one advantage it may have over other home-share companies is that rather than manage the far-flung properties of different owners, it can shave costs and improve the quality of its offerings by entering five- to 10-year leases with developers and then branding, furnishing and operating entire “apart hotel” properties. (It even has partners in China making its furniture.)

As CEO and former real estate banker Jay Roberts told us earlier this week, the plan is to open up 25 of these buildings across the U.S. over the next couple of years. The units will average 1,500 square feet and feature three bedrooms and if all goes as planned, they’ll cost 10 to 25 percent below hotel prices, too.

And if the go-go property management market turns? Roberts insists that Domio can “slow down growth if necessary.” He also notes that “Airbnb was founded out of the recession, supported by people who were interested in saving money. We’re starting to see companies that want to be more cost-effective, too.”

Domio had earlier raised $5 million in equity and convertible debt from angel investors in the real estate industry; altogether it has now amassed funding of $67 million.

Lessons from building Brex into a billion-dollar startup

When I think about my experience as an immigrant and entrepreneur in Silicon Valley, I remember growing up in Brazil and how we saw tech founders and CEOs as kings. We imagined what it would be like to assume the throne.

But these weren’t just any kings. Silicon Valley was the kingdom of nerds and underdogs. We identified with these guys, they were just like us. We were fed the myth of a Silicon Valley meritocracy, and the illusion that all you needed was ambition, determination, and a good idea to meet the right person and get funded.

What we didn’t understand was that this myth was not completely rooted in reality. Not everyone has access to the American Dream, and those who do have a track record of success before they’re given their moment to prove, or in our case, pitch ourselves.

Part of this disconnect was cultural. In Brazil, when I began my first startup, Pagar.me, a payment processing company, my co-founder Pedro Franceschi and I were two 16 year-old kids who learned how to code before we were ten. While it was hard for people to take us seriously initially—I mean, would you quit your job to work for two 16 year- olds? Being so young also worked to our advantage; it revealed that we were passionate, driven, and invested in tech at an age that we didn’t need to be.

Once we got our start-up off the ground, our employees were as invested in us as we were invested in them and the company. That’s because in Brazil, most of us grew up with parents that stayed their whole lives at the same company. You grew with the company, and that’s the approach we took when it came to hiring for our first company: who did we see sharing our same vision and growing with us?

Coming to the United States was almost a completely opposite experience. The barrier of entry was much higher. You have to go to the right college, graduate from right incubator programs, develop relationships with the right VCs, and have at least one successful startup under your belt before anyone would even consider booking a meeting with you.

Pedro and I had to carefully position ourselves before we even got to the Valley. When we finally did get to the U.S., we had already launched a successful startup and we were accepted to Stanford. Soon after, we were accepted by Y-Combinator, and that’s where we built relationships with the key players that would open up the doors for future meetings.

With our current startup, Brex,  we found that there weren’t just cultural differences at play, but different approaches we needed to take in order for our business to be successful. For example, in Brazil, we bootstrapped our first startup, and as a result, we had to find our product-market fit immediately. When you are so cash-constrained, it also limits how much you can build your company, and you think in terms of short-term wins instead of sustained growth. Your growth strategy is confined and you’re constantly reacting to your immediate client demands.

In the U.S., VCs and angel-investors aren’t interested in the short-term. They’re interested in long-term growth and how you are going to deliver 10x profits over a ten year period. Our strategy could no longer be: plan as we go and grow with our customer. Instead, we needed to deliver a roadmap, and when that roadmap changed or evolved, communicate those changes and adopt a culture of transparency.   

Additionally, we learned how difficult it is to find and retain  talent in the U.S.; it can feel like a Sisyphean task. Millennials for example, spend less than two years on average at a job, and if you spend six years or more at the same company, recruiters will actually ask you: “why?” So how can you build a company for the long-term in an environment where employees are not personally invested in the growth of your company?

We also learned that many successful tech startups offer stock options to their early employees, but as the company evolves and changes over time, those same stock options are not offered to future employees. This creates the exact opposite of a meritocracy. Why would a new employee work harder, longer, and bring more to the table if you are not going to be compensated for it?

Instead of using this broken model, we have invested in paying our team higher wages upfront, and based on performance, we award our team members with stock options. We want to be a company that people are proud of working at longterm, and we want to create a culture that is merit-based.

While some of the myths that we first believed in about Silicon Valley are now laughable looking back, they were also really instructional as to how we wanted to build our company and what pitfalls we wanted to avoid.

Even though nearly half of tech startups are founded by immigrant entrepreneurs, we have a cultural learning curve in order to have the opportunity to be “the next unicorn.” And maybe that’s the point, we’re experiencing a moment in time during which myths and unicorns no longer serve us, and what we need instead is the background, experience, and vision to create a company that is worth the hype.

Facebook launches ‘Hunt for False News’ debunk blog as fakery drops 50%

Facebook hopes detailing concrete examples of fake news it’s caught — or missed — could improve news literacy, or at least prove it’s attacking the misinformation problem. Today Facebook launched “The Hunt for False News,” in which it examines viral B.S., relays the decisions of its third-party fact-checkers and explains how the story was tracked down. The first edition reveals cases where false captions were put on old videos, people were wrongfully identified as perpetrators of crimes or real facts were massively exaggerated.

The blog’s launch comes after three recent studies showed the volume of misinformation on Facebook has dropped by half since the 2016 election, while Twitter’s volume hasn’t declined as drastically. Unfortunately, the remaining 50 percent still threatens elections, civil discourse, dissident safety and political unity across the globe.

In one of The Hunt’s first examples, it debunks that a man who posed for a photo with one of Brazil’s senators had stabbed the presidential candidate. Facebook explains that its machine learning models identified the photo, it was proven false by Brazilian fact-checker Aos Fatos, and Facebook now automatically detects and demotes uploads of the image. In a case where it missed the mark, a false story touting NASA would pay you $100,000 to study you staying in bed for 60 days “racked up millions of views on Facebook” before fact-checkers found NASA had paid out $10,000 to $17,000 in limited instances for studies in the past.

While the educational “Hunt” series is useful, it merely cherry-picks random false news stories from over a wide time period. What’s more urgent, and would be more useful, would be for Facebook to apply this method to currently circulating misinformation about the most important news stories. The New York Times’ Kevin Roose recently began using Facebook’s CrowdTangle tool to highlight the top 10 recent stories by engagement about topics like the Brett Kavanaugh hearings.

If Facebook wanted to be more transparent about its successes and failures around fake news, it’d publish lists of the false stories with the highest circulation each month and then apply the Hunt’s format explaining how they were debunked. This could help dispel myths in society’s understanding that may be propagated by the mere abundance of fake news headlines, even if users don’t click through to read them.

The red line represents the decline of Facebook engagement with “unreliable or dubious” sites

But at least all of Facebook’s efforts around information security — including doubling its security staff from 10,000 to 20,000 workers, fact checks and using News Feed algorithm changes to demote suspicious content — are paying off:

  • A Stanford and NYU study found that Facebook likes, comments, shares and reactions to links to 570 fake news sites dropped by more than half since the 2016 election, while engagements through Twitter continued to rise, “with the ratio of Facebook engagements to Twitter shares falling by approximately 60 percent.”
  • A University of Michigan study coined the metric “Iffy Quotient” to assess the how much content from certain fake news sites was distributed on Facebook and Twitter. When engagement was factored in, it found Facebook’s levels had dropped to nearly 2016 volume; that’s now 50 percent less than Twitter.
  • French newspaper Le Monde looked at engagement with 630 French websites across Facebook, Twitter, Pinterest and Reddit. Facebook engagement with sites dubbed “unreliable or dubious” has dropped by half since 2015.

Of course, given Twitter’s seeming paralysis on addressing misinformation and trolling, they’re not a great benchmark for Facebook to judge by. While it’s useful that Facebook is outlining ways to spot fake news, the public will have to internalize these strategies for society to make progress. That may be difficult when the truth has become incompatible with many peoples’ and politicians’ staunchly held beliefs.

In the past, Facebook has surfaced fake news-spotting tips atop the News Feed and bought full-page newspaper ads trying to disseminate them. The Hunt for Fake News would surely benefit from being embedded where the social network’s users look everyday instead of buried in its corporate blog.

Researchers discover a new way to identify 3D printed guns

Researchers at the University at Buffalo have found that 3D printers have fingerprints, essentially slight differences in design that can be used to identify prints. This means investigators can examine the layers of a 3D printed object and pinpoint exactly which machine produced the parts.

“3D printing has many wonderful uses, but it’s also a counterfeiter’s dream. Even more concerning, it has the potential to make firearms more readily available to people who are not allowed to possess them,” said Wenyao Xu, lead author of the study.

The researchers found that tiny wrinkles in each layer of plastic can be used to identify a “printer’s model type, filament, nozzle size and other factors cause slight imperfections in the patterns.” They call their technology PrinTracker.

“Like a fingerprint to a person, these patterns are unique and repeatable. As a result, they can be traced back to the 3D printer,” wrote the researchers.

This process works primarily with FDM printers like the Makerbot which use long spools of filament to deposit layers of plastic onto a build plate. Because the printers used in 3D printed guns are usually more complex and more expensive there could be less variation in the individual layers and, more importantly, the layers might be harder to discern. However, for some simpler plastic parts could exhibit variations.

“3D printers are built to be the same. But there are slight variations in their hardware created during the manufacturing process that lead to unique, inevitable and unchangeable patterns in every object they print,” said Xu.

Virtual reality makes food taste better

In another example of VR bleeding into real life, Cornell University food scientists found that cheese eaten in pleasant VR surroundings tasted better than the same cheese eaten in a drab sensory booth.

About 50 panelists who used virtual reality headsets as they ate were given three identical samples of blue cheese. The study participants were virtually placed in a standard sensory booth, a pleasant park bench and the Cornell cow barn to see custom-recorded 360-degree videos.

The panelists were unaware that the cheese samples were identical, and rated the pungency of the blue cheese significantly higher in the cow barn setting than in the sensory booth or the virtual park bench.

That’s right: cheese tastes better on a virtual farm versus inside a blank, empty cyberia.

“When we eat, we perceive not only just the taste and aroma of foods, we get sensory input from our surroundings – our eyes, ears, even our memories about surroundings,” said researcher Robin Dando.

To be clear, this research wasn’t designed to confirm whether VR could make food taste better but whether or not VR could be used as a sort of taste testbed, allowing manufacturers to let people try foods in different places without, say, putting them on an airplane or inside a real cow barn. Because food tastes differently in different surroundings, the ability to simulate those surroundings in VR is very useful.

“This research validates that virtual reality can be used, as it provides an immersive environment for testing,” said Dando. “Visually, virtual reality imparts qualities of the environment itself to the food being consumed – making this kind of testing cost-efficient.”

Twilio shops, Uber and Lyft IPO scuttlebutt, and Instacart raises $600M

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week we had the Three Excellent Friends (Connie Loizos, Danny Chrichton, and Alex Wilhelm) on hand to kick things about with Scale Venture Partner’s own Rory O’Driscoll.

As I’ve written the last few weeks, what a pile of news we’ve had recently. And like the last few episodes, we had to pick and choose what to drill into. This week: Twilio-Sendgrid, Palantir, Uber, Lyft, and Tencent Music IPOs, Instacart, and Saudi Arabia.

In order, I think? First, we tackled the week’s biggest venture-themed M&A: Twilio buying SendGrid. Keep in mind that they are both recent IPOs; Twilio went out in 2016, and SendGrid in 2017.

The $2 billion-ish all-stock transaction is effectively Twilio using its rich market cap (rich in terms of its revenue and profit multiples) to snag an obvious (though intelligent) extension of API-powered communications toolset.

Next up we dug into the chance that Palantir is worth $41 billion. Spoiler: It isn’t. Then we chatted the two other recently-floated IPO valuations for Uber ($120 billion) and Lyft ($15 billion). They probably make more sense, depending a little on how you add and then divide.

All that and we also touched on the recent delay in the Tencent Music IPO, a profitable company.

Then we riffed through the Instacart round ($600 million more at a $7.6 billion valuation; wow), and re-touched on Silicon Valley’s currently least popular dinner party topic: how much Saudi money has recently gone to work powering tech startups.

A big thanks to you for not only sticking with Equity for so long, but also for making it quite literally as popular as it has ever been. It’s super fun to have the biggest crew with us every week that we’ve ever had.

You, yes you, are a delight.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

Jane.VC, a new fund for female entrepreneurs, wants founders to cold email them

Want to pitch a venture capitalist? You’ll need a “warm introduction” first. At least that’s what most in the business will advise.

Find a person, typically a man, who made the VC you’re interested in pitching a whole bunch of money at some point and have them introduce you. Why? Because VCs love people who’ve made them money; naturally, they’ll be willing to hear you out if you’ve got at least one money maker on your side.

There’s a big problem with that cycle. Not all entrepreneurs are friendly with millionaires and not all entrepreneurs, especially those based outside Silicon Valley or from underrepresented backgrounds, have anyone in their network to provide them that coveted intro.

Jane.VC, a new venture fund based out of Cleveland and London wants entrepreneurs to cold email them. Send them your pitch, no wealthy or successful intermediary necessary. The fund, which has so far raised $2 million to invest between $25,000 and $150,000 in early-stage female-founded companies across industries, is scrapping the opaque, inaccessible model of VC that’s been less than favorable toward women.

“We like to say that Jane.VC is venture for every woman,” the firm’s co-founder Jennifer Neundorfer told TechCrunch.

Neundorfer, who previously founded and led an accelerator for Midwest startups called Flashstarts after stints at 21st Century Fox and YouTube, partnered with her former Stanford business school classmate Maren Bannon, the former chief executive officer and co-founder of LittleLane. So far, they’ve backed insurtech company Proformex and Hatch Apps, an enterprise software startup that makes it easier for companies to create and distribute mobile and web apps.

“We are going to shoot them straight”

Jane.VC, like many members of the next generation of venture capital funds, is bucking the idea that the best founders can only be found in Silicon Valley. Instead, the firm is going global and operating under the philosophy that a system of radical transparency and honesty will pay off.

“Let’s be efficient with an entrepreneur’s time and say no if it’s not a hit,” Neundorfer said. “I’ve been on the opposite end of that coaching. So many entrepreneurs think a VC is interested and they aren’t. An entrepreneur’s time is so valuable and we want to protect that. We are going to shoot them straight.”

Though Jane.VC plans to invest across the globe, the firm isn’t turning its back on Bay Area founders. Neundorfer and Bannon will leverage their Silicon Valley network and work with an investment committee of nine women based throughout the U.S. to source deals. 

“We are women that have raised money and have been through the ups and downs of raising money in what is a very male-dominated world,” Neundorfer added. “We believe that investing in women is not only the right thing to do but that you can make a lot of money doing it.”

E-moto startup Alta Motors reportedly powers down

Brisbane, California based e-motorcycle startup Alta Motors has ceased operations, TechCrunch has confirmed. 

Earlier today Asphalt and Rubber — and several subsequent outlets — reported the company stopped operating this morning, fired its staff, and may be looking for a buyer. Alta has yet to comment on the situation.

“As of this morning I no longer represent Alta Motors so I’m not in a position to speak on it,” a former Alta Motors spokesperson told TechCrunch on background when asked about the shutdown. “I forwarded your request for more info to the board, and they’ll have to comment,” said the former comms rep. Alta’s head office has not respond to requests for comment.

The EV company specializes in producing dual-sport and high performance electric powered off-road motorcycles. The startup had raised $45 million and counts Tesla co-founders Marc Tarpenning and Martin Eberhard among its investors.

Alta made news in March when it entered a co-development partnership with Harley Davidson. This aligned with Harley’s EV push, including the debut of a production e-moto by 2019, an expanded electric line-up to follow, and the opening of a Silicon Valley research facility.

Harley Davidson wouldn’t give a solid “no” to reports its partnership with Alta had concluded but their statement TechCrunch seems a pretty strong indication they’re business with the startup is in the past.

“Our collaborative efforts with Alta Motors were productive and we were pleased with the development work we partnered on,” Harley Davidson Communications Director Patricia Sweeney told TechCrunch.  

TechCrunch visited Alta’s facilities, tested its motorcycles, and interviewed co-founder Marc Fenigstein earlier this year. The startup has 70 dealerships nationwide  and our reporting flagged it is a potential acquisition target in a motorcycle industry that could be shifting electric.

On the competition level, Alta has been attempting compete with gas bikes by seeking entrance in American Motorcycle Association sanctioned motocross events. In September, the company became the first e-moto to earn a podium spot in AMA competition in another race class, endurocross.

With Harley Davidson’s EV commitment potentially pushing the motorcycle industry to voltage, Alta could be a discounted acquisition and R&D buy for Indian Motorcycle or  other major gas companies — Honda, Yamaha, BMW — who have been slow to develop production e-motos.