Exclusive: From dinners with Travis Kalanick to fired after maternity leave: one of CloudKitchens’ earliest employees is suing

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Travis Kalanick, CEO of CloudKitchens

Image Credits: Bryce Durbin / TechCrunch

Isabella Vincenza, one of CloudKitchens’ earliest employees, never imagined she would be suing her now-former employer.

Hired as a full-time salesperson in 2018, she became a mainstay at President’s Club dinners hosted by CEO Travis Kalanick at his Bel Air home throughout 2020 and 2021. These dinners were prized, invite-only events for top salespeople at CloudKitchens, a company that provides delivery-only commercial kitchens known as “ghost kitchens.”

The gatherings started with cocktails by the pool. Then the partygoers would mingle indoors until they sat for a chef-prepared dinner. Vincenza recalled Kalanick would greet her with a hug and praise her work. Sometimes, he would invite her to sit near him during dinner and they would chat throughout the meal.

“If you were the best salesperson, you were his favorite person because you were making the company a lot of money,” Vincenza told TechCrunch, adding that she was also CloudKitchens’ first female salesperson. 

In August 2022, she arrived at one President’s Club dinner visibly pregnant. When she tried to sit across from Kalanick at the dinner, she recalled him asking her to move over. She said he hardly looked at her, would not engage in conversation, and didn’t say goodbye. Vincenza left the dinner unsettled.

“That was the beginning of me being a pariah,” Vincenza told TechCrunch.

She and another describe a “boys’ club”

Vincenza was fired in July 2023, a bit over six months after returning from maternity leave, according to her lawsuit and the company.

After receiving a right-to-sue letter from California’s Department of Fair Employment and Housing in August 2024, she filed the suit in Los Angeles Superior Court. In it she named Kalanick and two other executives, CloudKitchens’ parent company City Storage Systems, and its associate company CSS Payroll as defendants. The suit alleges wrongful termination, sex discrimination, and a hostile work environment, among other claims. TechCrunch has obtained a copy. 

Vincenza claims in her suit that she spent years “dodging all of her employer’s sexist curveballs,” that the “office culture was that of a boys’ club,” and alleges she received less pay and a smaller equity grant than her male counterparts. She also claims she was “retaliated against for standing up for herself” following her pregnancy and subsequent maternity leave. 

The company rejects her allegations. “Isabella Vincenza had one of the highest salaries amongst hundreds of account executives, yet in the last year of her tenure at the company she was one of the lowest performers,” company spokesperson Devon Spurgeon told TechCrunch. Spurgeon added that an “internal company review” found Vincenza’s claims of discrimination “to have no merit and the irony of all of this is that the fabricated and fraudulent allegations were against the people who were her biggest supporters.” Spurgeon also denied that the seating arrangements for the President’s Club dinner were influenced by Vincenza’s pregnancy, and said seating was a reflection of the seniority of people in attendance.

Vincenza’s lawsuit echoes some of the allegations that led Kalanick to step down as CEO of Uber in 2017 after Susan Fowler’s viral blog post sparked an investigation into that workplace’s culture. The investigation revealed a culture so rampant with gender discrimination and workplace harassment that Uber fired more than 20 people later that year. While Kalanick himself wasn’t personally accused of sexual discrimination or harassment, shortly after the report and firings, Kalanick resigned. 

In 2018, he bought a controlling interest in City Storage Systems, owner of CloudKitchens, became CSS’s CEO, and brought some ex-Uber employees along with him. By 2021, some employees felt CloudKitchens’ workplace was Uber all over again, with long hours and a boys’-club mentality; with one executive, the head of recruiting, resigning after an internal misconduct investigation, according to reports in Business Insider that year.

TechCrunch has viewed Slack messages from 2022, unrelated to Vincenza’s case, in which employees were cajoled for not being at work after 7 p.m.; male employees were openly messaging about another male employee having sex; and CloudKitchens co-founder Barak Diskin used a dating profile-style shirtless photo of himself for his Slack profile photo.

Female employees have sued CloudKitchens before. One woman sued alleging unfair labor practices like being forced to work overtime without pay, and being denied meal breaks. Another sued claiming gender and race-based pay discrimination (Kalanick was also originally named in this suit but was later dropped as a defendant). The first case was moved to private arbitration; the second was settled in 2023.

These women are not the only ones who found CloudKitchens’ culture difficult. One former employee who worked in the Los Angeles office told TechCrunch that people were frequently fired and employees worked to the edge of burnout, sometimes staying in the office until 2 a.m. This employee, whose identity is known to TechCrunch, asked to remain anonymous for fear of retaliation.

This employee also used the words “boys’ club” to describe CloudKitchens’ culture. Slack messages viewed by TechCrunch showed employees using the N-word in a public group. At one point, someone hung a photoshopped picture of Donald Trump on the wall, showing him as a muscled, bare-chested boxer standing in a ring, complete with boxing gloves and a championship belt, according to a photo seen by TechCrunch. 

While Vincenza did not comment on those incidents, she did tell TechCrunch: “It was always a bro culture.”

Spurgeon denies the characterization of a boys’ club or bro culture, pointing out that women hold senior positions at the company, including the heads of HR, legal, and the enterprise sales team. She also said that the company has “no evidence” of Slack messages containing the N-word and that its policy is to “promptly” address and remove any inappropriate messages or photos brought to management’s attention.

Fired after going to HR

Vincenza’s lawsuit claims that in 2020, when Vincenza was a top sales performer, Jessica Morton — CloudKitchens’ head of business development and partnerships, and one of the other defendants in this suit — accidentally revealed on a Zoom call that two of Vincenza’s male teammates were being paid more than $20,000 more than Vincenza was. Afterward, Vincenza received a $5,000 pay increase. (Morton did not respond to TechCrunch’s requests for comment.) 

In addition to the dinners during the years before her maternity leave, Vincenza remembers routinely being praised at all-hands meetings where the top salespeople were named.

“It was a big deal,” Vincenza said. “You were a leader. You were an example. And I was presented that way to the rest of the company. ‘Isabella is number one.’” 

In January 2022, Vincenza informed her manager, as well as Kalanick, that she was pregnant and planning on taking maternity leave. Vincenza claims in the suit that her manager “insinuated” she could lose her job if she took leave, and reportedly asked how she was going to work while pregnant. While the company has a maternity leave policy, Vincenza says the company struggled to finalize details of how hers would be handled.

“Two days before I went on maternity leave, they couldn’t figure it out,” she said.

When she returned to work in January 2023 after her three-and-a-half month leave, the suit alleges Vincenza found that her largest accounts had been reassigned. The spokesperson says that her accounts were assigned to others in her absence but denies that the changes were punitive.

“Let me prove that I’m still number one,” Vincenza remembered telling herself after returning to work. For instance, salespeople were given a goal of closing at least one larger 5- to 10-kitchen deal — meaning signing a client that would rent multiple kitchens. One quarter, she says she was the only salesperson to land a 10-kitchen deal but received no public congratulations, nor an invite to the President’s Club, her suit alleges. Spurgeon says of the 10-kitchen deal that it never actually closed. “Nothing was actually signed. No funds were received by the company.”

Vincenza’s suit also alleges that Kalanick teased her once when she called home to check on her four-month-old during the day, and that leadership would call her or schedule meetings in the evenings and early mornings when they knew she was unavailable, which are also allegations the company denies. 

Vincenza says she went to HR in early 2023 to discuss her overall treatment since returning from maternity leave and was terminated shortly after. 

“She was not given any reprimands. She was not given a performance plan to review. The termination comes out of the blue,” Vincenza’s lawyer, Patrick Downes, a partner at Manteau Downes LLP, told TechCrunch. “This is really unheard of for a company of any size in California.”

The spokesperson denies this claim as well, saying Vincenza’s manager did have ongoing discussions about her performance.

As for why Vincenza decided to sue, given how difficult such lawsuits are to pursue, she says, “I don’t want other people to be treated that way at this company.” Then she added: “I don’t want this company to be that way for other moms, other women.” 

More bad news for Elon Musk after X user's legal challenge to shadowban prevails

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X logo impaling twitter bird logo

Image Credits: Bryce Durbin / TechCrunch

It’s shaping up to be a terrible, no good, really bad news month for the company formerly known as Twitter. Elon Musk’s X has just been hit with a first clutch of grievances by the European Union for suspected breaches of the bloc’s Digital Services Act — an online governance and content moderation rulebook that features penalties of up to 6% of global annual turnover for confirmed violations.

But that’s not the only high-level decision that hasn’t gone Musk’s way lately. TechCrunch has learned that earlier this month X was found to have violated a number of provisions of the DSA and the bloc’s General Data Protection Regulation (GDPR), a pan-EU privacy framework where fines can reach 4% of annual turnover, following legal challenges brought by an individual after X shadowbanned his account.

X has long been accused of arbitrary shadowbanning — a particular egregious charge for a platform that claims to champion free speech.

PhD student Danny Mekić took action after he discovered X had applied visibility restrictions to his account in October last year. The company applied restrictions after he had shared a news article about an area of law he was researching, related to the bloc’s proposal to scan citizens’ private messages for child sexual abuse material (CSAM). X did not notify it had shadowbanned his account — which is one of the issues the litigation focused on.

Mekić only noticed his account had been impacted with restrictions when third parties contacted him to say they could no longer see his replies or find his account in search suggestions.

After his attempts to contact X directly to rectify the issue proved fruitless, Mekić filed a series of legal claims against X in the Netherlands under the EU Small Claims process, alleging the company had infringed key elements of the DSA, including failing to provide him with a point of contact (Article 12) to deal with his complaints; and failing to provide a statement of reasons (Article 17) for the restrictions applied to his account.

Mekić is a premium subscriber to X so he also sued the company for breach of contract.

On top of all that, after realizing he had been shadowbanned Mekić sought information from X about how it had processed his personal data — relying on the GDPR to make these data access requests. The regulation gives people in the EU a right to request a copy of information held on them, so when X failed to provide the personal information requested he had grounds for his second case: filing claims for breach of the bloc’s data protection rules.

In the DSA case, in a ruling on July 5 the court found X’s Irish subsidiary (which is actually still called Twitter) to be in breach of contract and ordered it to pay compensation for the period Mekić was deprived of the service he had paid for (just $1.87 — but the principle is priceless).

The court also ordered X to provide Mekić with a point of contact so he could communicate his complaints to the company within two weeks or face a fine of €100 per day.

On the DSA Article 17 complaint, Mekić also prevailed as the court agreed X should have sent him a statement of reasons when it shadowbanned his account. Instead he had to take the company to court to learn that an automated system had restricted his account after he shared a news article.

“I’m happy about that,” Mekić told TechCrunch. “There was a huge debate in the courtroom. Twitter said the DSA is not proportional and that shadowbans of complete accounts do not fall under DSA obligations.”

As a further kicker, the court deemed X’s general terms and conditions to be in breach of the EU’s Unfair Terms in Consumer Contracts Directive.

In the GDPR case, which the court ruled on on July 4, Mekić chalked up another series of wins. This case concerned the aforementioned data access rights but also Article 22 (automated decision making) — which states data subjects should not be subject to decisions based solely on automated processing where they have legal or significant effect.

The court agreed that the impact of X’s shadowban on Mekić was significant, finding it affected his professional visibility and potentially his employment prospects. The court therefore ordered X to provide him with meaningful information about the automated decision-making as required by the law within one month, along with the other personal information X has so far withheld, which Mekić had requested under GDPR data access rights.

If X continues to violate these data protection rules, the company is on the hook for fines of up to €4,000 per day.

X was also ordered to pay Mekić’s costs for both cases.

While the pair of rulings only concern individual complaints, they could have wider implications for enforcement of the DSA and the GDPR against X. The former is — as we’ve seen today — only just gearing up, as X gets stung with a first step of preliminary breach findings. But privacy campaigners have spent years warning the GDPR is being under-enforced against major platforms. And the strategic role core data protections should play in driving platform accountability remains far weaker than it could and should be.

“Bringing the claims was a final attempt to clarify my unjustified shadowban and get it removed,” Mekić told TechCrunch. “And, of course, I hope Twitter’s compliance with legal transparency obligations and low-threshold contact will improve to make it even better.”

“The European Commission seems to be very busy with investigations under the DSA. So far, regarding Twitter, the Commission seems to focus mainly on stricter content moderation. My appeal to the Commission is also to be mindful of the flip side: platforms should not overreach in their non-transparent content moderation practices,” he also told us.

“If you ask me, there is a simpler solution, namely, to curb algorithms on social media such as on Twitter, which are designed to maximise engagement and revenue and to bring back the chronological timelines of the heyday of Twitter and other social media platforms as standard.”

While the EU itself has a key role in enforcing the DSA’s rules on X, as is designated as a very large online platform (VLOP), its compliance with the wider general rules falls to a European member state-level oversight body: Ireland’s media regulator, Coimisiún na Meán.

Enforcement of the EU’s flagship data protection regime on Twitter/X typically falls to another Irish body, the Data Protection Commission (DPC), which is routinely accused of dragging its feet on investigating complaints about Big Tech.

Asked for information about its enforcement of various long-standing GDPR complaints against X, a spokesperson for the DPC said it could not provide a response by the time of publication.

Individuals bringing small claims against major platforms to try to get them to abide by pan-EU law is clearly suboptimal; there’s supposed to be a whole system of regulatory supervision to ensure compliance.

“On a side note, I did experience how much time and effort it takes to litigate in court,” said Mekić. “Despite the fact that in principle it can be done without a lawyer. Even so, you spend almost a year on it while the other party can outsource it to a battery of lawyers with near-infinite budgets and just ignore it in the meantime: indeed, I have never had direct contact with anyone from Twitter, they only communicate with me through lawyers.”

Asked whether he’s hopeful the outcome of his two cases will bring an end to X’s arbitrary shadowbanning for all EU users, Mekić said he doesn’t think his own success will be enough — regulatory enforcement is going to be needed for that.

“I hope so, but I’m afraid not,” he said. “There is little focus on the commercial motives behind shadowbans. If a user breaks a rule, you could temporarily block their account. That is transparent. But that also removes that user’s ad revenue for the platform. Shadowbans are a solution for that: the user is unaware of anything and continues to engage with and generate advertising revenue for the platform.”

“It would be a brave decision by social media platforms to stop applying shadow bans and only impose transparent, contestable restrictions on users. But that will presumably lead to loss of revenue. I hope Twitter will set other platforms a good example and inform users transparently about account restrictions, as required by the DSA. To do so, platforms do need to put their commercial intentions second,” said Mekić.

“It does surprise me that the Commission has not identified anything about the large-scale shadowbanning practices that users do not receive notifications about,” he added. “It happens daily on a large scale and is easier to prove than what they are focusing on now.”

X has been contacted for a response to the rulings.

Elon Musk’s X faces first DSA probe in EU over illegal content risks, moderation, transparency and deceptive design

WazirX halts withdrawals after losing $230M worth crypto assets in security breach

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sample WazirX screens

Image Credits: WazirX

WazirX, a leading Indian crypto exchange, halted withdrawals Thursday after a security breach it called a “force majeure event” resulted in the loss of $230 million, nearly half its reserves.

The Mumbai-based firm said one of its multisig wallets had suffered a security breach. A multisig wallet requires two or more private keys for authentication. WazirX said its wallet had six signatories, five of whom were with WazirX team. Liminal, which operates a wallet infrastructure firm, said in a statement to TechCrunch that its preliminary investigation had found that a wallet created outside its ecosystem had been compromised.

“The cyber attack stemmed from a discrepancy between the data displayed on Liminal’s interface and the transaction’s actual contents,” said WazirX in a statement on Thursday. “During the cyber attack, there was a mismatch between the information displayed on Liminal’s interface and what was actually signed. We suspect the payload was replaced to transfer wallet control to an attacker.”

Lookchain, a third-party blockchain explorer, reported that more than 200 cryptocurrencies, including 5.43 billion SHIB tokens, over 15,200 Ethereum tokens, 20.5 million Matic tokens, 640 billion Pepe tokens, 5.79 million USDT and 135 million Gala tokens were “stolen” from the platform.

Blockchain data suggests the attackers are trying to offload the assets using the decentralized exchange Uniswap. Risk-management platform Elliptic reported that the hackers have affiliation with North Korea.

About $230 million in missing assets is significant for WazirX, which reported holdings of about $500 million in its June proof-of-reserves disclosure.

CoinSwitch and CoinDCX, two other leading crypto exchanges in India, assured their customers that their funds were secure and unaffected by this incident.

“Our wallet security remains robust,” Sumit Gupta, co-founder and chief executive of CoinDCX, wrote in a tweet.

“We advise all our crypto investors to be mindful of potential market volatility during this time and exercise caution in their trading and investment activities,” tweeted Ashish Singhal, co-founder and chief executive of PeepalCo, the group holding firm of CoinSwitch.

This is the latest setback for WazirX, which separated from Binance in early 2023 after the two crypto exchanges had a public and high-profile fallout in 2022. Two years after Binance announced it had acquired WazirX, the two companies started a dispute over the ownership of the Indian firm. Binance founder Changpeng Zhao eventually said that the two firms hadn’t been able to conclude the deal and moved to terminate Binance’s businesses with the Indian firm.

“This is a force majeure event beyond our control, but we are leaving no stone unturned to locate and recover the funds. We have already blocked a few deposits and reached out to concerned wallets for recovery. We are in touch with the best resources to help us in this endeavor,” WazirX said in a statement posted on its X account.

The story was updated throughout the day, including most recently at 11:03 p.m. India Standard Time to include WazirX’s confirmation that it lost the crypto assets in the security breach.

WazirX halts trading after $230 million 'force majeure' loss

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sample WazirX screens

Image Credits: WazirX

WazirX, one of India’s largest cryptocurrency exchanges, has “temporarily” suspended all trading activities on its platform days after losing about $230 million, nearly half of its reserves, in a security breach.

The Mumbai-based exchange said in a tweet Sunday evening that the cyberattack had substantially impaired its ability to maintain the critical 1:1 collateral ratio with assets, a move that raises more concerns about the adequacy of WazirX’s reserves and its ability to fully reimburse its customers.

WazirX suspended customer withdrawals earlier this week, after an attacker gained access to one of the exchange’s multi-signature wallets, where it stored crypto assets worth hundreds of millions of dollars. WazirX’s impacted wallet was protected by six signatories, five of whom were with the WazirX team.

“The cyberattack stemmed from a discrepancy between the data displayed on Liminal’s interface and the transaction’s actual contents,” the firm said earlier this week.

Earlier on Sunday, WazirX announced a bounty program of up to $23 million to reward anyone who could help the firm recover the stolen assets.

Risk-management platform Elliptic said earlier this week that its analysis had found that the attacker had links to North Korea.

About $230 million in missing assets is significant for WazirX, which reported holdings of about $500 million in its June proof-of-reserves disclosure. The exchange called the security breach “a force majeure event.”

Indian exchanges CoinSwitch and CoinDCX, both of which work with WazirX for some of their services, said earlier this week that their customers hadn’t been impacted by the attack on WazirX.

When a big company comes after a hot startup, it’s not a slam dunk decision to sell

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One hundred dollar bills raining from the sky between office buildings.

Image Credits: REB Images / Getty Images

Rumors first surfaced last month that Google was going after cloud security startup Wiz and a $23 billion offer was on the table, the most lucrative offer ever made for a startup. Before the deal eventually died, there would have been a lot of moving parts, and it’s fair to ask: What are the mechanics when a big deal like this is set in motion, and how does a startup decide to sell or not?

We spoke to Jyoti Bansal, who is founder and CEO at Harness, a developer tools startup that has raised approximately $575 million and has made a bunch of small acquisitions along the way. While Bansal doesn’t have direct knowledge of the Google-Wiz negotiation process, he experienced being courted by a large company when Cisco came after his previous startup AppDynamics. Cisco ended up buying the company just a few days before it was set to go public in 2017 for $3.7 billion.

He says there are three factors in play when it comes to deals like this. The first is how serious the offer is and whether it’s concrete or just exploratory. For a private company like Wiz, chances are it’s going to be exploratory at first because there is not a lot of public information available on its financials as there would be with a public company.

Bansal says when he went through the AppDynamics negotiations with Cisco, he had recently filed an S-1 with the SEC and all his financial cards were already on the table. “So for an acquirer, acquiring a private company that’s on the IPO path and a few days from an IPO is essentially no different than acquiring a public company,” he said. “All the information they need is out there, and they don’t have to worry about if they’re missing some information, or the information is not clean, audited or scrutinized.”

Once you determine how serious the company is, you have to explore whether this would be a good match. “The second factor in any kind of courtship that happens is what’s the reason for the combined company? Is that interesting? Is that exciting?” You also have to take into consideration what happens to your employees and your products: Will some employees lose their jobs? Will products be deprecated or canceled?

Finally, and perhaps most importantly, you have to scrutinize the economics of the deal to see whether they make sense and whether they are a good value for shareholders. From Wiz’s perspective, it was a huge offer (assuming the rumored amount was accurate) that was 46 times its current ARR and 23 times its projected 2025 ARR. Yet Wiz thought it would be better off remaining a private company.

In Bansal’s case, when Cisco came a courtin’, he was in the middle of his company’s IPO road show. It was days before the company was going public, but even with the information out there for Cisco to analyze, there were discussions, and it wasn’t easy for Bansal to give up his baby, even if the price eventually was right.

The two companies knew that there was a strict deadline in front of them. Once the IPO happened, that would be that. The negotiations ended up involving three offers, and when it was over, Cisco got its company. “Ultimately, it comes down to what’s best for all the shareholders in terms of risk and reward. It’s all about what’s the risk of being independent versus the reward of selling,” Bansal said.

The first offer was in line with IPO value and was an easy no. The second one was better, but after discussing it with the board, Bansal said no again. “Then they came back with a third offer, and in the third offer, it made sense from a risk versus reward for our shareholders to sell the company.” And sell they did in the range 2.5x to 3x the IPO valuation.

It’s easy to think that with billions of dollars at stake, it would be an easy decision to sell, but it really wasn’t. “It was not an easy decision from our side. It sounds like [$3.7 billion] is a very easy decision.” But he says you have to poll your investors, your fellow executives, your board members — and they all have different interests, and you are trying to come to the right decision for everyone involved.

Wiz thought it was better staying independent. For AppDynamics, with the pressure of the IPO deadline looming and a good offer on the table, the company finally went for it. “So for us to independently grow into that valuation of two and a half, three times more than our IPO valuation would have taken us at least three years of good execution . . . ,” he said. “And there were a lot of unknowns, a lot of risk for the company like what happens in the next three years.”

But that doesn’t mean he doesn’t have some regrets in spite of making more than 300 of his employees millionaires with the transaction and personal wealth for himself. When he looks back at the timing of the announcement, he realizes that it’s entirely possible he could have made that much money and more.

“I always wonder what AppDynamics could have become if we had gone through with the IPO. There are a lot of unknowns, and hindsight is 20/20, but if you look back, we sold the company in 2017, the few years after that sale, after 2017, were some of the best boom years in the tech industry, especially for B2B SaaS,” he said. In the end, he might have made more, but instead he started Harness, and he’s happy building a second company.

It’s important to note that Wiz’s offer remains mired in rumor, so it may or may not be that much money. But if it was, the founders could also have regrets if Wiz doesn’t grow into the value it could have had if it had taken the big money money and run.

TikTok Lite: EU closes addictive design case after TikTok commits to not bring back rewards mechanism

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The TikTok logo is seen on an iPhone 11 Pro max

Image Credits: Nur Photo (opens in a new window) / Getty Images

The European Commission has closed a Digital Services Act (DSA) investigation of a rewards feature in TikTok Lite by accepting commitments from the social media giant to permanently withdraw the feature from the EU.

The TikTok Lite “task and reward” mechanism, launched in France and Spain earlier this year, lets users earn points for doing in-app activities like watching and liking videos. These points could be exchanged for Amazon vouchers. TikTok Lite is an alternative, lower-bandwidth version of TikTok’s app that the company offers in some markets.

TikTok has also agreed not to try and circumvent its commitment, such as by launching the same feature under a different name or deploying a version that serves as an equivalent alternative, according to the Commission. Although the settlement applies to the TikTok Lite reward mechanism the EU was investigating, it’s not a blanket ban on TikTok launching any rewards features in the future.

When the EU opened a probe of the rewards feature back in April, the Commission said it was worried the design of the mechanism might negatively impact the mental health of young users by “stimulating addictive behavior.”

TikTok had temporarily suspended the rewards mechanism in the EU soon after the Commission launched its investigation. The EU had threatened to use interim powers to shut down the feature while it investigated concerns that it was encouraging people to spend excessive amounts of time on the app.

Briefing journalists on background, a senior Commission official said the enforcer is happy with the outcome as it has delivered a quick result that enables EU citizens, including minors, to be protected.

The settlement does mean the EC has not formally found TikTok to be in breach of the DSA, so there’s no penalty. However, if TikTok fails to keep to its commitments, the Commission emphasized that the company could be sanctioned immediately under the DSA, which allows for fines of up to 6% of global annual turnover without the need for a fresh investigation. So TikTok has a pretty big compliance incentive here.

The Commission said it would monitor TikTok’s compliance to its commitments using existing processes and DSA powers, including with the help of Member State-level authorities that oversee compliance with the regulation’s general rules.

Commenting in a statement, Thierry Breton, the EU’s internal market commissioner, said: “The available brain time of young Europeans is not a currency for social media — and it never will be. We have obtained the permanent withdrawal of TikTok Lite Rewards programme, which could have had very addictive consequences. The DSA is in full swing.”

TikTok spokesperson Elliot Burton sent TechCrunch a statement about the settlement: “We always seek to engage constructively with the European Commission and other regulators. TikTok is pleased to have reached an amicable resolution and has now withdrawn the TikTok Lite rewards programme which was launched in France and Spain in April, which we had already voluntarily suspended.”

While this TikTok DSA case is now closed, another, more wide-ranging investigation announced back in February is still ongoing.

That case concerns the main TikTok app’s algorithm, among other areas. The Commission has said it’s worried the design of the tracking-based recommender engine may lead to “rabbit hole effects,” where users who view one video on a topic can be recommended more extreme videos that could lead to an amplification of harmful content, such as videos promoting eating disorders.

The EU is also concerned TikTok is not using robust enough age-assurance measures to protect kids from accessing inappropriate content. TikTok’s compliance with DSA transparency requirements are also being investigated.

For more on how the DSA and its sister regulation, the Digital Markets Act (DMA), are impacting Big Tech platforms, check out our earlier reporting.

After nine years, Google's Nest Learning Thermostat gets an AI makeover

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Clock Face Silver Nest Learning Thermostat

Image Credits: Google Nest

After nine long years, Google is finally refreshing the device that gave Nest its name. The company on Tuesday announced the launch of the Nest Learning Thermostat 4, 13 years after the release of the original and nearly a decade after the Learning Thermostat 3 and ahead of the Made by Google 2024 event next week.

Google hopes this release will usher in a new era for its smart home play. The last several years saw a marked slowdown from the company, leading many to believe the category was all but dead in the water. The Nest line’s stasis coincided with a period of relative quiet for Amazon’s Echo line.

It’s no coincidence that the new Learning Thermostat arrives as Google is amping up work on its generative AI model, Gemini. While the system appears to replace Google Assistant on Pixel and other Android devices, the branding is sticking around for the smart home line — albeit powered by many of Google’s new LLM-based models.

Gemini will effectively boost Assistant’s conversational capabilities. Generative AI is capable of powering the kinds of more natural language interactions Google and Amazon have been working for more than a decade to achieve.

Google notes in a release, “We’re thrilled to unveil how we’re using Gemini models to make our devices smarter and simpler to use than ever, starting with cameras and home automation. We’re also using Gemini models to make Google Assistant much more natural and helpful on your Nest speakers and displays.”

Image Credits: Google Nest

The fourth-generation Learning Thermostat refines the line’s familiar design with thinner and sleeker hardware. The always-on display is more customizable, launching with a choice of four faces that offer up more contextual information once someone comes closer. Each features a combination of time, temperature and air quality.

Google opted to keep touch functionality off the display, instead maintaining the familiar turning radial hardware. The screen itself is 60% larger than the gen 3’s, with an edge to edge design that finally ditches the thick black bezel.

In addition to a more conversational Assistant, new AI models are being leveraged for what Google calls “micro-adjustments,” based on the user’s habits. That’s the whole “learning” part of the product name. The refinements also utilize outside temperature to determine adjustments, all in a bid to save on energy consumption.

The $280 smart thermostat comes with an additional Temperature Sensor in-box. The pebble-like piece of hardware can be placed in any key spot in the home to give the system a better overall notion of average temperature. Additional sensors can be purchased at $40 apiece or $99 for a three-pack.

The third-gen Learning Thermostat will remain on shelves until the stock is fully depleted. The more budget-focused Thermostat E, which is currently priced at $130, is staying put.

Preorders open today for the new Nest Learning Thermostat. It hits shelves August 20.

Reddit back online after a software update took it down

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distorted reddit logo

Image Credits: TechCrunch

Reddit’s mobile and web applications went down on Wednesday afternoon, with more than 150,000 users reporting outages on Downdetector as of 1:30 p.m. in San Francisco. When trying to access Reddit’s homepage, users were met with the message, “Server error. Try again later.”

The company itself reported a “degraded status” for Reddit.com as of 1:16 p.m. PT on its status page, but now says its systems are operational roughly an hour later. After investigating the issue, the company says a software update pushed out to the platform was to blame.

“Earlier today we shipped an update that unintentionally impacted platform stability,” said Reddit spokesperson Tim Rathschmidt in an email to TechCrunch. “We deployed a fix and are back up and running.”

As of 2:16 p.m., Reddit’s status page was updated to show that the issue had been resolved after a fix was implemented.

In the past 90 days, Reddit has had very few major outages like this, according to its status page. Some users may still be having difficult accessing the platform, but services should trickle back online shortly, according to the company.

TipRanks, an AI-based stock tip evaluator created after its founder got burned by bad advice, sells for $200M to Prytek

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stock market on the trading floor in NY

Image Credits: Spencer Platt / Getty Images

Financial chatter has been a major traffic spinner on social media, but it can be challenging (if not impossible) to separate useful signals from the noise. A company called TipRanks uses AI and other analytics to try to make better sense of all that. And now, on the back of its growing popularity, it is getting snapped up for $200 million by Prytek, a developer of business process products for financial services, human resources and other enterprise verticals.

TipRanks uses natural-language processing and data science techniques to build datasets and other insights based on the vast quantities of market data on the internet. It’s currently used by some 50 million monthly active individual users, some of whom use a limited free plan, and some of whom pay either $30/month or $50/month for more enhanced datasets and other material. Enterprise customers meanwhile include Nasdaq, Robinhood, CIBC, Morgan Stanley, TD and Rakuten alongside other hedge funds, banks, brokers and exchanges.

Prytek had already been a big investor in TipRanks since 2017, most recently leading a $77 million round in the company in 2021.

Ironically for a company that has built a business on helping people make smarter bids on stocks, TipRanks was the subject of a little bidding war itself.

TechCrunch understands that a popular online destination for financial news and data — possibly the biggest in part because it doesn’t use a paywall — approached TipRanks also with an acquisition offer of a similar amount. As Prytek was already a major investor, it was made aware of the offer and made one of its own, a deal that made strategic sense, since the plan is not only to continue growing its base of individual users, but to make deeper inroads into more enterprise customers.

“Prytek owns a few other big companies that are active and financial services,” said Uri Gruenbaum, TipRanks’ CEO, in an interview with TechCrunch. “They were able to open a lot of doors for us. And when I mean doors, I mean getting tier-one banks to work with us.”

From what we understand, Prytek now has more than 90% of the company in this deal.

“They didn’t want to sell us at this point, and so they bought out all the other investors and the founders and the employees,” Gruenbaum said. There is in fact one outstanding existing investor who has yet to sell up but the name and other details are not being disclosed.

TipRanks’ growth up to now has come on the back of some bigger trends in the worlds of finance and technology.

The stock market has always thrived on the back of chatter about what to buy and sell, and which business is doing better and which is not. That was a situation that went into high gear with the rise of social media, where sites like Reddit, Twitter (now X) and others became hotbeds for hot-takes and lots more. The sea of rank-and-file analysts from financial houses writing and publishing financial reports swelled with a new wave of armchair analysts. But without any quality control, it’s become a risky process to really know what information might be more or less credible.

That situation occasionally spills over into the absurd, when you consider the immense speculation, disseminated on social media, that swirls around cryptocurrency — whose utility is questionable at best, or outright illegal and very bad at worst — or the infamous GameStop Squeeze.

Couple this with the rise of apps like Revolut, Robinhood and eToro. These platforms have blown up and democratized the stock market, making it significantly easier for ordinary people to buy and sell shares in public companies alongside those like institutional investors and high-net-worth individuals, which have traditionally come to the table with significant money to put down.

You might say these apps make it easier to make money, yet arguably they make it all too easy to lose money, too.

All those dynamics — both good and bad — of the modern trading landscape were something that Gruenbaum learned about the hard way.

It was 2012, and while working at a company called ARX, Gruenbaum had received a bonus of $20,000. He excitedly decided he would invest the money — an unexpected windfall — in the stock market, following what he thought was a bona fide good recommendation he came across online.

ARX still lives (it was acquired eventually by Docusign), but that bonus did not: Gruenbaum got burned by what turned out to be a very bad tip and he lost the money.

Not all was lost, though. The scenario became a source of inspiration for him, leading him to co-found TipRanks with chief technology officer Gilad Gat to make better sense of all that noise.

TipRanks essentially was created to address both the challenge and opportunity at hand. It uses natural-language processing to parse all of the conversation and content creation that is taking place, which can include published reports but also posts on social media. Through that, it produces a vast amount of aggregated data on different companies, industries and financial instruments; and it identifies and ranks different analysts, from those working at the big banks through to “finfluencers.”

Early on, Gruenbaum said that TipRanks would get calls from analysts who didn’t want to get tracked by it — namely if they’d made a bad call or two.

“We had analysts complaining that they couldn’t find new jobs because of us,” he recalled. Indeed, when doing due diligence on candidates, Google searches would turn up records from TipRanks on various candidates. Gruenbaum is unapologetic about that kind of transparency. “Look, if you’re a research company, if a candidate is good, or average or has underperformed, if that’s going to stop you from finding a job, that is good. That’s how it should be. You’re not supposed to give advice if you don’t know what you’re saying,” he said.

He says that now that TipRanks has grown in size and reach, it’s less likely to get those calls. Now, he said, most of the time when they get contacted by analysts, it’s to update their profile pictures.

The company has built the mainstay of its business around the U.S. stock market and English-language chatter and content, but in more recent years it’s also expanded into Canada and Europe. In addition to making some acquisitions, part of its future plans will be to create more material in localized languages. While the institutional and enterprise opportunity is an immense one, Gruenbaum said the main focus will remain on more tools and access for individual users — something Prytek is also keen to develop.

“We spotted TipRanks’ potential to democratize investment information nearly a decade ago and knew we wanted to be part of their journey,” Andrey Yashunsky, founder of Prytek, said in a statement. “With our strong performing financial services division, having a resource which has revolutionised access to investment insights, data and news will shape the future of our ever-expanding value chain.”

Updated to clarify the ownership stake in this deal.

a16z offers social media tips after its founder’s ‘attack’ tweet goes viral

by with No Comment Tech

Image Credits: Bloomberg / Getty Images

On Friday, the venture firm Andreessen Horowitz tweeted out a link to its guide on how to “build your social media presence,” which features advice for founders on things like “how to find your people” and “how often to post.”

The timing of the tweet was ironic given the social media frenzy on Friday after founder Ben Horowitz posted on X. He was upset over an article in The San Francisco Standard about his family’s political donations and accused his rival, VC Michael Moritz — who owns The Standard — of orchestrating the story. (The Standard’s executive editor, Jon Steinberg, said he assigned the article and that Moritz had nothing to do with it.) 

Andreessen Horowitz’s Marc Andreessen has also had a storied, and sometimes combative, relationship with social media. A Meta board member, he quit Twitter in 2016 because it had grown too toxic for him but returned and quickly rebuilt a huge following. Earlier this year, he and VC Vinod Khosla fought about AI on the X platform (formerly Twitter), in which a16z is an investor.