Pixalate tunes into $18.1M for fraud prevention in television, mobile advertising

Pixalate raised $18.1 million in growth capital for its fraud protection, privacy and compliance analytics platform that monitors connected television and mobile advertising.

Western Technology Investment and Javelin Venture Partners led the latest funding round, which brings Pixalate’s total funding to $22.7 million to date. This includes a $4.6 million Series A round raised back in 2014, Jalal Nasir, founder and CEO of Pixalate, told TechCrunch.

The company, with offices in Palo Alto and London, analyzes over 5 million apps across five app stores and more 2 billion IP addresses across 300 million connected television devices to detect and report fraudulent advertising activity for its customers. In fact, there are over 40 types of invalid traffic, Nasir said.

Nasir grew up going to livestock shows with his grandfather and learned how to spot defects in animals, and he has carried that kind of insight to Pixalate, which can detect the difference between real and fake users of content and if fraudulent ads are being stacked or hidden behind real advertising that zaps smartphone batteries or siphons internet usage and even ad revenue.

Digital advertising is big business. Nasir cited Association of National Advertisers research that estimated $200 billion will be spent globally in digital advertising this year. This is up from $10 billion a year prior to 2010. Meanwhile, estimated ad fraud will cost the industry $35 billion, he added.

“Advertisers are paying a premium to be in front of the right audience, based on consumption data,” Nasir said. “Unfortunately, that data may not be authorized by the user or it is being transmitted without their consent.”

While many of Pixalate’s competitors focus on first-party risks, the company is taking a third-party approach, mainly due to people spending so much time on their devices. Some of the insights the company has found include that 16% of Apple’s apps don’t have privacy policies in place, while that number is 22% in Google’s app store. More crime and more government regulations around privacy mean that advertisers are demanding more answers, he said.

The new funding will go toward adding more privacy and data features to its product, doubling the sales and customer teams and expanding its office in London, while also opening a new office in Singapore.

The company grew 1,200% in revenue since 2014 and is gathering over 2 terabytes of data per month. In addition to the five app stores Pixalate is already monitoring, Nasir intends to add some of the China-based stores like Tencent and Baidu.

Noah Doyle, managing director at Javelin Venture Partners, is also monitoring the digital advertising ecosystem and said with networks growing, every linkage point exposes a place in an app where bad actors can come in, which was inaccessible in the past, and advertisers need a way to protect that.

“Jalal and Amin (Bandeali) have insight from where the fraud could take place and created a unique way to solve this large problem,” Doyle added. “We were impressed by their insight and vision to create an analytical approach to capturing every data point in a series of transactions —  more data than other players in the industry — for comprehensive visibility to help advertisers and marketers maintain quality in their advertising.”

 


By Christine Hall

All product creators can learn something from Jackbox Games’ user experiences

During this period of shelter-in-place, people have had to seek out new forms of entertainment and social interaction. Many have turned to a niche party series made by a company best known for an irreverent trivia game in the ’90s called “You Don’t Know Jack.”

Since 2014, the annual release of the Jackbox Party Pack has delivered 4-5 casual party games that run on desktop, mobile and consoles that can be played in groups as small as two and as large as 10. In a clever twist, players use smartphones as controllers, which is perfect for typing in prompts, selecting options, making drawings, etc.

The games are tons of fun and perfect for playing with friends over video conference, and their popularity has skyrocketed, as indicated by Google Trends. I polled my own Twitter following and found that nearly half of folks had played in the last month, though a full third hadn’t heard of Jackbox at all.

How do these games work?

There are more than 20 unique games across Jackbox Party Packs 1-6, too many to explain — but here are three of the most popular:

  • Fibbage: A twist on the traditional trivia game, players are asked to invent an answer to a question of obscure knowledge (e.g. “a Swedish man who works as a dishwasher receives disability benefits due to his unusual addiction to ____.”) Then all the invented answers are mixed in with the truth and players must select the real answer while avoiding fakes. You earn points for guessing correctly and for tricking other players (the answer is “heavy metal”).


    By Walter Thompson

Why is Dropbox reinventing itself?

According to Dropbox CEO Drew Houston, 80% of the product’s users rely on it, at least partially, for work.

It makes sense, then, that the company is refocusing to try and cement its spot in the workplace; to shed its image as “just” a file storage company (in a time when just about every big company has its own cloud storage offering) and evolve into something more immutably core to daily operations.

Earlier this week, Dropbox announced that the “new Dropbox” would be rolling out to all users. It takes the simple, shared folders that Dropbox is known for and turns them into what the company calls “Spaces” — little mini collaboration hubs for your team, complete with comment streams, AI for highlighting files you might need mid-meeting, and integrations into things like Slack, Trello and G Suite. With an overhauled interface that brings much of Dropbox’s functionality out of the OS and into its own dedicated app, it’s by far the biggest user-facing change the product has seen since launching 12 years ago.

Shortly after the announcement, I sat down with Dropbox VP of Product Adam Nash and CTO Quentin Clark . We chatted about why the company is changing things up, why they’re building this on top of the existing Dropbox product, and the things they know they just can’t change.

You can find these interviews below, edited for brevity and clarity.

Greg Kumparak: Can you explain the new focus a bit?

Adam Nash: Sure! I think you know this already, but I run products and growth, so I’m gonna have a bit of a product bias to this whole thing. But Dropbox… one of its differentiating characteristics is really that when we built this utility, this “magic folder”, it kind of went everywhere.


By Greg Kumparak

OneTrust raises $200M at a $1.3B valuation to help organizations navigate online privacy rules

GDPR, and the newer California Consumer Privacy Act, have given a legal bite to ongoing developments in online privacy and data protection: it’s always good practice for companies with an online presence to take measures to safeguard people’s data, but now failing to do so can land them in some serious hot water.

Now — to underscore the urgency and demand in the market — one of the bigger companies helping organizations navigate those rules is announcing a huge round of funding. OneTrust, which builds tools to help companies navigate data protection and privacy policies both internally and with its customers, has raised $200 million in a Series A led by Insight that values the company at $1.3 billion.

It’s an outsized round for a Series A, being made at an equally outsized valuation — especially considering that the company is only three years old — but that’s because, according to CEO Kabir Barday, of the wide-ranging nature of the issue, and OneTrust’s early moves and subsequent pole position in tackling it.

“We’re talking about an operational overhaul in a company’s practices,” Barday said in an interview. “That requires the right technology and reach to be able to deliver that at a low cost.” Notably, he said that OneTrust wasn’t actually in search of funding — it’s already generating revenue and could have grown off its own balance sheet — although he noted that having the capitalization and backing sends a signal to the market and in particular to larger organizations of its stability and staying power.

Currently, OneTrust has around 3,000 customers across 100 countries (and 1,000 employees), and the plan will be to continue to expand its reach geographically and to more businesses. Funding will also go towards the company’s technology: it already has 50 patents filed and another 50 applications in progress, securing its own IP in the area of privacy protection.

OneTrust offers technology and services covering three different aspects of data protection and privacy management.

Its Privacy Management Software helps an organization manage how it collects data, and it generates compliance reports in line with how a site is working relative to different jurisdictions. Then there is the famous (or infamous) service that lets internet users set their preferences for how they want their data to be handled on different sites. The third is a larger database and risk management platform that assesses how various third-party services (for example advertising providers) work on a site and where they might pose data protection risks.

These are all provided either as a cloud-based software as a service, or an on-premises solution, depending on the customer in question.

The startup also has an interesting backstory that sheds some light on how it was founded and how it identified the gap in the market relatively early.

Alan Dabbiere, who is the co-chairman of OneTrust, had been the chairman of Airwatch — the mobile device management company acquired by VMware in 2014 (Airwatch’s CEO and founder, John Marshall, is OneTrust’s other co-chairman). In an interview, he told me that it was when they were at Airwatch — where Barday had worked across consulting, integration, engineering and product management — that they began to see just how a smartphone “could be a quagmire of information.”

“We could capture apps that an employee was using so that we could show them to IT to mitigate security risks,” he said, “but that actually presented a big privacy issue. If [the employee] has dyslexia [and uses a special app for it] or if the employee used a dating app, you’ve now shown things to IT that you shouldn’t have.”

He admitted that in the first version of the software, “we weren’t even thinking about whether that was inappropriate, but then we quickly realised that we needed to be thinking about privacy.”

Dabbiere said that it was Barday who first brought that sensibility to light, and “that is something that we have evolved from.” After that, and after the VMware sale, it seemed a no-brainer that he and Marshall would come on to help the new startup grow.

Airwatch made a relatively quick exit, I pointed out. His response: the plan is to stay the course at OneTrust, with a lot more room for expansion in this market. He describes the issues of data protection and privacy as “death by 1,000 cuts.” I guess when you think about it from an enterprising point of view, that essentially presents 1,000 business opportunities.

Indeed, there is obvious growth potential to expand not just its funnel of customers, but to add in more services, such as proactive detection of malware that might leak customers’ data (which calls to mind the recently-fined breach at British Airways), as well as tools to help stop that once identified.

While there are a million other companies also looking to fix those problems today, what’s interesting is the point from which OneTrust is starting: by providing tools to organizations simply to help them operate in the current regulatory climate as good citizens of the online world.

This is what caught Insight’s eye with this investment.

“OneTrust has truly established themselves as leaders in this space in a very short timeframe, and are quickly becoming for privacy professionals what Salesforce became for salespeople,” said Richard Wells of Insight. “They offer such a vast range of modules and tools to help customers keep their businesses compliant with varying regulatory laws, and the tailwinds around GDPR and the upcoming CCPA make this an opportune time for growth. Their leadership team is unparalleled in their ambition and has proven their ability to convert those ambitions into reality.”

Wells added that while this is a big round for a Series A it’s because it is something of an outlier — not a mark of how Series A rounds will go soon.

“Investors will always be interested in and keen to partner with companies that are providing real solutions, are already established and are led by a strong group of entrepreneurs,” he said in an interview. “This is a company that has the expertise to help solve for what could be one of the greatest challenges of the next decade. That’s the company investors want to partner with and grow, regardless of fund timing.”


By Ingrid Lunden

Enterprise AR is an opportunity to “do well by doing good”, says General Catalyst

A founder-investor panel on augmented reality (AR) technology here at TechCrunch Disrupt Berlin suggests growth hopes for the space have regrouped around enterprise use-cases, after the VR consumer hype cycle landed with yet another flop in the proverbial ‘trough of disillusionment’.

Matt Miesnieks, CEO of mobile AR startup 6d.ai, conceded the space has generally been on another downer but argued it’s coming out of its third hype cycle now with fresh b2b opportunities on the horizon.

6d.ai investor General Catalyst‘s Niko Bonatsos was also on stage, and both suggested the challenge for AR startups is figuring out how to build for enterprises so the b2b market can carry the mixed reality torch forward.

“From my point of view the fact that Apple, Google, Microsoft, have made such big commitments to the space is very reassuring over the long term,” said Miesnieks. “Similar to the smartphone industry ten years ago we’re just gradually seeing all the different pieces come together. And as those pieces mature we’ll eventually, over the next few years, see it sort of coalesce into an iPhone moment.”

“I’m still really positive,” he continued. “I don’t think anyone should be looking for some sort of big consumer hit product yet but in verticals in enterprise, and in some of the core tech enablers, some of the tool spaces, there’s really big opportunities there.”

Investors shot the arrow over the target where consumer VR/AR is concerned because they’d underestimated how challenging the content piece is, Bonatsos suggested.

“I think what we got wrong is probably the belief that we thought more indie developers would have come into the space and that by now we would probably have, I don’t know, another ten Pokémon-type consumer massive hit applications. This is not happening yet,” he said.

“I thought we’d have a few more games because games always lead the adoption to new technology platforms. But in the enterprise this is very, very exciting.”

“For sure also it’s clear that in order to have the iPhone moment we probably need to have much better hardware capabilities,” he added, suggesting everyone is looking to the likes of Apple to drive that forward in the future. On the plus side he said current sentiment is “much, much much better than what it was a year ago”.

Discussing potential b2b applications for AR tech one idea Miesnieks suggested is for transportation platforms that want to link a rider to the location of an on-demand and/or autonomous vehicle.

Another area of opportunity he sees is working with hardware companies — to add spacial awareness to devices such as smartphones and drones to expand their capabilities.

More generally they mentioned training for technical teams, field sales and collaborative use-cases as areas with strong potential.

“There are interesting applications in pharma, oil & gas where, with the aid of the technology, you can do very detailed stuff that you couldn’t do before because… you can follow everything on your screen and you can use your hands to do whatever it is you need to be doing,” said Bonatsos. “So that’s really, really exciting.

“These are some of the applications that I’ve seen. But it’s early days. I haven’t seen a lot of products in the space. It’s more like there’s one dev shop is working with the chief innovation officer of one specific company that is much more forward thinking and they want to come up with a really early demo.

“Now we’re seeing some early stage tech startups that are trying to attack these problems. The good news is that good dollars is being invested in trying to solve some of these problems — and whoever figures out how to get dollars from the… bigger companies, these are real enterprise businesses to be built. So I’m very excited about that.”

At the same time, the panel delved into some of the complexities and social challenges facing technologists as they try to integrate blended reality into, well, the real deal.

Including raising the spectre of Black Mirror style dystopia once smartphones can recognize and track moving objects in a scene — and 6d.ai’s tech shows that’s coming.

Miesnieks showed a brief video demo of 3D technology running live on a smartphone that’s able to identify cars and people moving through the scene in real time.

“Our team were able to solve this problem probably a year ahead of where the rest of the world is at. And it’s exciting. If we showed this to anyone who really knows 3D they’d literally jump out of the chair. But… it opens up all of these potentially unintended consequences,” he said.

“We’re wrestling with what might this be used for. Sure it’s going to make Pokémon game more fun. It could also let a blind person walk down the street and have awareness of cars and people and they may not need a cane or something.

“But it could let you like tap and literally have people be removed from your field of view and so you only see the type of people that you want to look at. Which can be dystopian.”

He pointed to issues being faced by the broader technology industry now, around social impacts and areas like privacy, adding: “We’re seeing some of the social impacts of how this stuff can go wrong, even if you assume good intentions.

“These sort of breakthroughs that we’re having are definitely causing us to be aware of the responsibility we have to think a bit more deeply about how this might be used for the things we didn’t expect.”

From the investor point of view Bonatsos said his thesis for enterprise AR has to be similarly sensitive to the world around the tech.

“It’s more about can we find the domain experts, people like Matt, that are going to do well by doing good. Because there are a tonne of different parameters to think about here and have the credibility in the market to make it happen,” he suggested, noting: “It‘s much more like traditional enterprise investing.”

“This is a great opportunity to use this new technology to do well by doing good,” Bonatsos continued. “So the responsibility is here from day one to think about privacy, to think about all the fake stuff that we could empower, what do we want to do, what do we want to limit? As well as, as we’re creating this massive, augmented reality, 3D version of the world — like who is going to own it, and share all this wealth? How do we make sure that there’s going to be a whole new ecosystem that everybody can take part of it. It’s very interesting stuff to think about.”

“Even if we do exactly what we think is right, and we assume that we have good intentions, it’s a big grey area in lots of ways and we’re going to make lots of mistakes,” conceded Miesnieks, after discussing some of the steps 6d.ai has taken to try to reduce privacy risks around its technology — such as local processing coupled with anonymizing/obfuscating any data that is taken off the phone.

“When [mistakes] happen — not if, when — all that we’re going to be able to rely on is our values as a company and the trust that we’ve built with the community by saying these are our values and then actually living up to them. So people can trust us to live up to those values. And that whole domain of startups figuring out values, communicating values and looking at this sort of abstract ‘soft’ layer — I think startups as an industry have done a really bad job of that.

“Even big companies. There’d only a handful that you could say… are pretty clear on their values. But for AR and this emerging tech domain it’s going to be, ultimately, the core that people trust us.”

Bonatsos also pointed to rising political risk as a major headwind for startups in this space — noting how China’s government has decided to regulate the gaming market because of social impacts.

“That’s unbelievable. This is where we’re heading with the technology world right now. Because we’ve truly made it. We’ve become mainstream. We’re the incumbents. Anything we build has huge, huge intended and unintended consequences,” he said.

“Having a government that regulates how many games that can be built or how many games can be released — like that’s incredible. No company had to think of that before as a risk. But when people are spending so many hours and so much money on the tech products they are using every day. This is the [inevitable] next step.”


By Natasha Lomas