The Consumer Financial Protection Bureau (CFPB) is suing SoLo Funds, a fintech company that enables peer-to-peer lending, alleging that the company used “digital dark patterns” to deceive borrowers and illegally took fees while advertising to consumers that there were no fees.
“The CFPB is suing SoLo for using digital trickery to hide interest and fees on its online loans,” CFPB Director Rohit Chopra said in a May 17 press release announcing the suit. “SoLo has had repeated run-ins with state regulators, and we are putting a stop to their fake tipping scheme.”
The CFPB also alleges that the company misrepresented the cost of loans, interfered with the ability of consumers to understand what they were agreeing to, collected on loans they shouldn’t have and made false threats related to credit reporting. CFPB also stated that SoLo Funds’ business model did not provide safeguards.
“SoLo’s advertisements and loan disclosures tout no-interest loans when, in fact, virtually all loans on the SoLo Platform include a lender ‘tip’ that goes to the lender, a SoLo ‘donation’ that goes to SoLo, or both,” according to the CFPB.
Rodney Williams and Travis Holoway started SoLo Funds in 2018 to provide lending to underserved Americans, especially those who are often targeted by predatory lending practices due to their low- to middle-class status.
The company raised some $13 million in venture-backed funding, according to Crunchbase. TechCrunch profiled the company in 2021 when it raised $10 million in Series A funding. Along the way, SoLo Funds attracted some high-profile investors, including Serena Ventures, (founded by tennis legend Serena Williams), Endeavor Catalyst, Alumni Ventures and Techstars.
In 2023, SoLo Funds said it reached 1 million registered users and more than 1.3 million downloads.
Meanwhile, this new lawsuit adds to the recent troubles that have plagued the company. Last year, the company settled several lawsuits with entities, including the District of Columbia and the State of California, for alleged predatory lending practices, and the Connecticut Department of Banking regarding a 2022 temporary cease-and-desist order.
Then in December 2023, SoLo Funds was in the news again, this time related to being investigated by the State of Maryland.
Regarding the new CFPB lawsuit, SoLo Funds claims in a statement to TechCrunch that it was voluntarily working toward a regulatory framework with the CFPB for the last 18 months. It said that on May 16, both entities primarily agreed on a path forward and, said “we were blindsided the next morning with a suit.”
SoLo Funds CEO Travis Holoway said in a statement that “minority innovators were challenged to create new models to address our communities’ financial inequalities.” And now that the company is doing that, the “regulators seem driven by press releases when they should be motivated by true consumer protection and empowering equitable solutions.”
The CFPB said it is suing to change SoLo Fund’s practices, for refunds to customers and for financial penalties such as disgorgement, damages and possibly additional civil penalty fees. CFPB aims to “prevent future violations, monetary relief in the form of redress to consumers, disgorgement of ill-gotten gains, and damages, and the imposition of civil money penalties.”
Meta on Wednesday announced the creation of an AI advisory council with only white men on it. What else would we expect? Women and people of color have been speaking out for decades about being ignored and excluded from the world of artificial intelligence despite them being qualified and playing a key role in the evolution of this space.
Meta did not immediately respond to our request to comment about the diversity of the advisory board.
This new advisory board differs from Meta’s actual board of directors and its Oversight Board, which is more diverse in gender and racial representation. Shareholders did not elect this AI board, which also has no fiduciary duty. Meta told Bloomberg that the board would offer “insights and recommendations on technological advancements, innovation, and strategic growth opportunities.” It would meet “periodically.”
It’s telling that the AI advisory council is composed entirely of businesspeople and entrepreneurs, not ethicists or anyone with an academic or deep research background. While one could argue that current and former Stripe, Shopify and Microsoft executives are well positioned to oversee Meta’s AI product roadmap given the immense number of products they’ve brought to market among them, it’s been proven time and time again that AI isn’t like other products. It’s a risky business, and the consequences of getting it wrong can be far-reaching, particularly for marginalized groups.
The women in AI making a difference
In a recent interview with TechCrunch, Sarah Myers West, managing director at the AI Now Institute, a nonprofit that studies the social implications of AI, said that it’s crucial to “critically examine” the institutions producing AI to “make sure the public’s needs [are] served.”
“This is error-prone technology, and we know from independent research that those errors are not distributed equally, they disproportionately harm communities that have long borne the brunt of discrimination,” she said. “We should be setting a much, much higher bar.”
Women are far more likely than men to experience the dark side of AI. Sensity AI found in 2019 that 96% of AI deepfake videos online were nonconsensual, sexually explicit videos. Generative AI has become far more prevalent since then, and women are still the targets of this violative behavior.
In one high-profile incident from January, nonconsensual, pornographic deepfakes of Taylor Swift went viral on X, with one of the most widespread posts receiving hundreds of thousands of likes, and 45 million views. Social platforms like X have historically failed at protecting women from these circumstances — but since Taylor Swift is one of the most powerful women in the world, X intervened by banning search terms like “taylor swift ai” and taylor swift deepfake.”
But if this happens to you and you’re not a global pop sensation, then you might be out of luck. There are numerous reports of middle school and high school-aged students making explicit deepfakes of their classmates. While this technology has been around for a while, it’s never been easier to access — you don’t have to be technologically savvy to download apps that are specifically advertised to “undress” photos of women or swap their faces onto pornography. In fact, according to reporting by NBC’s Kat Tenbarge, Facebook and Instagram hosted ads for an app called Perky AI, which described itself as a tool to make explicit images.
Two of the ads, which allegedly escaped Meta’s detection until Tenbarge alerted the company to the issue, showed photos of celebrities Sabrina Carpenter and Jenna Ortega with their bodies blurred out, urging customers to prompt the app to remove their clothes. The ads used an image of Ortega from when she was just 16 years old.
The mistake of allowing Perky AI to advertise was not an isolated incident. Meta’s Oversight Board recently opened investigations into the company’s failure to handle reports of sexually explicit, AI-generated content.
It is imperative for women’s and people of color’s voices to be included in the innovation of artificial intelligence products. For so long, such marginalized groups have been excluded from the development of world-changing technologies and research, and the results have been disastrous.
An easy example is the fact that until the 1970s, women were excluded from clinical trials, meaning entire fields of research developed without the understanding of how it would impact women. Black people, in particular, see the impacts of technology built without them in mind — for example, self-driving cars are more likely to hit them because their sensors might have a harder time detecting Black skin, according to a 2019 study done by the Georgia Institute of Technology.
Algorithms trained on already discriminatory data only regurgitate the same biases that humans have trained them to adopt. Broadly, we already see AI systems perpetuating and amplifying racial discrimination in employment, housing and criminal justice. Voice assistants struggle to understand diverse accents and often flag the work by non-native English speakers as being AI-generated since, as Axios noted, English is AI’s native tongue. Facial recognition systems flag Black people as possible matches for criminal suspects more often than white people.
The current development of AI embodies the same existing power structures regarding class, race, gender and Eurocentrism that we see elsewhere, and it seems not enough leaders are addressing it. Instead, they are reinforcing it. Investors, founders and tech leaders are so focused on moving fast and breaking things that they can’t seem to understand that generative AI — the hot AI tech of the moment — could make the problems worse, not better. According to a report from McKinsey, AI could automate roughly half of all jobs that don’t require a four-year degree and pay over $42,000 annually, jobs in which minority workers are overrepresented.
There is cause to worry about how a team of all-white men at one of the most prominent tech companies in the world, engaging in this race to save the world using AI, could ever advise on products for all people when only one narrow demographic is represented. It will take a massive effort to build technology that everyone — truly everyone — could use. In fact, the layers needed to actually build safe and inclusive AI — from the research to the understanding on an intersectional societal level — are so intricate that it’s almost obvious that this advisory board will not help Meta get it right. At least where Meta falls short, another startup could arise.
We’re launching an AI newsletter! Sign up here to start receiving it in your inboxes on June 5.
Over the past four years, the connected fitness space has experienced some of the highest highs and lowest lows in the venture world. According to figures from Crunchbase, funding — predictably — peaked in 2021. As a whole, the fitness category accounted for $6.4 billion raised over 376 rounds.
In May of 2021, Peloton announced that it would be funding an Ohio-based production facility to the tune of $400 million. That was a drop in the bucket: The company generated $4.13 billion in revenue for the year, more than a 40% increase over 2020.
On Monday, the fitness company announced that it was seeking to refinance its debt. It also entered into a five-year, $1 billion loan as it looks to bring on a new CEO following Barry McCarthy’s exit earlier this month after two years with the company. Ultimately, Peloton got high on its own supply, assuming that pandemic-fueled gains were the new normal.
Competitor Tonal (which Peloton had reportedly considered acquiring in 2022), laid off more than one-third of its staff in 2022. In April 2023, it announced a new CEO and a $130 million round at a significantly reduced valuation. Still, it was more than happy to offer a trade-in program at the end of the year, after Lululemon stopped sales of its Mirror devices.
The pandemic has certainly had long-term impacts on the economy. For instance, while work from home has obviously declined from its COVID heights, a report earlier this year notes that it’s still in the area of three to four times more common than it was in 2019. Connected fitness’ big bet was that while some regression was inevitable, the cultural shift was going to be permanent.
Ultimately, however, many were eager for a “return to normality,” and arrival of vaccinations, coupled with lowered rates of infection, emboldened many to get back to the gym. Unlike commuting into an artificially lit cubical farm five times a week, plenty of people genuinely enjoy the experience of working out in person.
The struggle isn’t universal, however. Hydrow, which raised $55 million in 2022, purchased a majority stake in AI-based strength training firm Speede Fitness earlier this month. The firm has done a good job capitalizing on interest around rowing machines, even as Peloton’s answer to the category was entirely overshadowed by its very public struggles.
Despite some major regressions and broader economic headwinds, there’s always money to be raised if you’ve got a compelling enough product. Ultimately, however, those rounds should be consistently lower than they were in the home fitness salad days. For a recent example, Kabata, the maker of the “world’s first AI-powered dumbbells,” announced a $5 million seed round on Tuesday. That’s follows a $2 million seed round raised in May 2022.
I wouldn’t want to be a connected fitness firm raising in 2024. As my financial adviser recently told me, “the best time to buy a house is last year.” When you’re working to bring a product to market, you can’t always wait until the market forces are ideal. Seems that we may never see the likes of 2021 again for connected fitness.
Indian ride-hailing startup BluSmart has started operating in Dubai, TechCrunch has exclusively learned and confirmed with its executive. The move to Dubai, which has been rumored for months, could help counter the likes of Careem, Uber and Hala in the United Arab Emirates’ most populous city.
The Gurugram-based startup quietly enabled the new Dubai service through its app earlier this week and has created a separate subdomain for Dubai on its website. BluSmart co-founder Anmol Jaggi confirmed to TechCrunch that the pilot started Tuesday with 100 Audi E-Tron SUVs and 130 drivers in the city. The formal launch will be in early June, he said.
BluSmart started planning its debut in Dubai in early 2023, people familiar with the matter told TechCrunch. When contacted in late March last year, BluSmart CBO Tushar Garg refuted the development. However, its co-founder Punit Goyal said in an interview with a local media outlet later in the year that the startup was launching in Abu Dhabi and Dubai between November and December.
Without disclosing a specific timeline, Jaggi told TechCrunch that the Abu Dhabi launch will be later this year.
The ride-hailing startup, which counts BP Ventures, Mayfield India Fund and Green Frontier Capital among its early backers, was founded in 2019 by Jaggi, his brother Puneet Jaggi, and Punit Goyal to take on the duopoly of Uber and SoftBank-backed Ola. It started with an EV fleet in Gurugram and Delhi and later expanded to Bengaluru in 2022.
In January, the startup raised $25 million from Switzerland-headquartered impact fund ResponsAbility to pump up its charging infrastructure.
Last month, BluSmart announced its annual run rate grew 102% to $60 million, marking a compound annual growth rate of 300% over the last three years. The startup has a fleet of more than 7,300 EVs, covering nearly 286 million miles, and aims to reach 10,000 by the end of 2024.
This is not a joke: According to a job listing, President Joe Biden’s reelection campaign needs someone to manage memes. The “Partner Manager, Content and Meme Pages” hire will “initiate and manage day-to-day operations in engaging the internet’s top content and meme pages.” The job pays up to $85,000.
Yes, it’s absurd to be a professional meme manager. But in this age, digital organizing is just as valuable as canvassing IRL at a farmers market. If a candidate is trying to meet voters where they are, then they need to be online, where going viral can mean connecting with millions of people. That’s why Biden’s campaign has a TikTok account, even though the president signed a bill that could effectively ban the app.
Image Credits: Screenshot by TechCrunch
“I do think that we can and should infuse relevant, trendy and fun moments into how we are communicating, especially on digital platforms,” Annie Wu Henry, a creator and digital communications strategist, told TechCrunch in February. “But while we’re doing that, we need to continue to be strategic and intentional and mindful, even if it’s a meme.”
Even before making this hire, the Biden campaign has already relied on memes to appeal to voters. The Dark Brandon meme, which stems from alt-right conspiracy theories about the president, has been so ubiquitous on Biden’s campaign accounts that it feels stale. But the people seem to love it: Last August, Dark Brandon merch accounted for 54% of the campaign store’s total revenue, according to Axios.
Former president Donald Trump has also embraced memes as he campaigns for his return to the White House. When Trump’s mugshot predictably went viral, his campaign immediately started selling T-shirts, mugs and beer koozies with the image, accompanied by text that says “Never Surrender.”
Biden is far from the first candidate to notice that what happens online can sway an election. For as long as social media has existed, it’s been a valuable tool for political organizers, but the pandemic accelerated campaigns’ embrace of digital tactics. When Ed Markey (D-MA) ran for reelection to the Senate in 2020, Gen Z posters around the country concocted “the Markeyverse,” an organic online movement to make sure a climate-friendly senator kept his seat. Meanwhile, the anonymous online personality Organizer Memes has been hosting meme trainings for political organizations such as the South Carolina Young Democrats. In these trainings, participants collaboratively make memes, discuss what makes a good meme, and learn how to use existing meme templates to react in real time to breaking political news.
Given the Biden administration’s potential to ban TikTok, young people may see through the campaign’s attempt to woo them with memes. But if nothing else, embracing social media is proof that a campaign is at least trying to engage a younger demographic.
Gen Z is losing its political voice on social media
Meta on Wednesday announced the creation of an AI advisory council with only white men on it. What else would we expect? Women and people of color have been speaking out for decades about being ignored and excluded from the world of artificial intelligence despite them being qualified and playing a key role in the evolution of this space.
Meta did not immediately respond to our request to comment about the diversity of the advisory board.
This new advisory board differs from Meta’s actual board of directors and its Oversight Board, which is more diverse in gender and racial representation. Shareholders did not elect this AI board, which also has no fiduciary duty. Meta told Bloomberg that the board would offer “insights and recommendations on technological advancements, innovation, and strategic growth opportunities.” It would meet “periodically.”
It’s telling that the AI advisory council is composed entirely of businesspeople and entrepreneurs, not ethicists or anyone with an academic or deep research background. While one could argue that current and former Stripe, Shopify and Microsoft executives are well positioned to oversee Meta’s AI product roadmap given the immense number of products they’ve brought to market among them, it’s been proven time and time again that AI isn’t like other products. It’s a risky business, and the consequences of getting it wrong can be far-reaching, particularly for marginalized groups.
The women in AI making a difference
In a recent interview with TechCrunch, Sarah Myers West, managing director at the AI Now Institute, a nonprofit that studies the social implications of AI, said that it’s crucial to “critically examine” the institutions producing AI to “make sure the public’s needs [are] served.”
“This is error-prone technology, and we know from independent research that those errors are not distributed equally, they disproportionately harm communities that have long borne the brunt of discrimination,” she said. “We should be setting a much, much higher bar.”
Women are far more likely than men to experience the dark side of AI. Sensity AI found in 2019 that 96% of AI deepfake videos online were nonconsensual, sexually explicit videos. Generative AI has become far more prevalent since then, and women are still the targets of this violative behavior.
In one high-profile incident from January, nonconsensual, pornographic deepfakes of Taylor Swift went viral on X, with one of the most widespread posts receiving hundreds of thousands of likes, and 45 million views. Social platforms like X have historically failed at protecting women from these circumstances — but since Taylor Swift is one of the most powerful women in the world, X intervened by banning search terms like “taylor swift ai” and taylor swift deepfake.”
But if this happens to you and you’re not a global pop sensation, then you might be out of luck. There are numerous reports of middle school and high school-aged students making explicit deepfakes of their classmates. While this technology has been around for a while, it’s never been easier to access — you don’t have to be technologically savvy to download apps that are specifically advertised to “undress” photos of women or swap their faces onto pornography. In fact, according to reporting by NBC’s Kat Tenbarge, Facebook and Instagram hosted ads for an app called Perky AI, which described itself as a tool to make explicit images.
Two of the ads, which allegedly escaped Meta’s detection until Tenbarge alerted the company to the issue, showed photos of celebrities Sabrina Carpenter and Jenna Ortega with their bodies blurred out, urging customers to prompt the app to remove their clothes. The ads used an image of Ortega from when she was just 16 years old.
The mistake of allowing Perky AI to advertise was not an isolated incident. Meta’s Oversight Board recently opened investigations into the company’s failure to handle reports of sexually explicit, AI-generated content.
It is imperative for women’s and people of color’s voices to be included in the innovation of artificial intelligence products. For so long, such marginalized groups have been excluded from the development of world-changing technologies and research, and the results have been disastrous.
An easy example is the fact that until the 1970s, women were excluded from clinical trials, meaning entire fields of research developed without the understanding of how it would impact women. Black people, in particular, see the impacts of technology built without them in mind — for example, self-driving cars are more likely to hit them because their sensors might have a harder time detecting Black skin, according to a 2019 study done by the Georgia Institute of Technology.
Algorithms trained on already discriminatory data only regurgitate the same biases that humans have trained them to adopt. Broadly, we already see AI systems perpetuating and amplifying racial discrimination in employment, housing and criminal justice. Voice assistants struggle to understand diverse accents and often flag the work by non-native English speakers as being AI-generated since, as Axios noted, English is AI’s native tongue. Facial recognition systems flag Black people as possible matches for criminal suspects more often than white people.
The current development of AI embodies the same existing power structures regarding class, race, gender and Eurocentrism that we see elsewhere, and it seems not enough leaders are addressing it. Instead, they are reinforcing it. Investors, founders and tech leaders are so focused on moving fast and breaking things that they can’t seem to understand that generative AI — the hot AI tech of the moment — could make the problems worse, not better. According to a report from McKinsey, AI could automate roughly half of all jobs that don’t require a four-year degree and pay over $42,000 annually, jobs in which minority workers are overrepresented.
There is cause to worry about how a team of all-white men at one of the most prominent tech companies in the world, engaging in this race to save the world using AI, could ever advise on products for all people when only one narrow demographic is represented. It will take a massive effort to build technology that everyone — truly everyone — could use. In fact, the layers needed to actually build safe and inclusive AI — from the research to the understanding on an intersectional societal level — are so intricate that it’s almost obvious that this advisory board will not help Meta get it right. At least where Meta falls short, another startup could arise.
We’re launching an AI newsletter! Sign up here to start receiving it in your inboxes on June 5.
Spotify launched its own font, the company announced on Wednesday. The music streaming service hopes that its new typeface, “Spotify Mix,” will help Spotify distinguish its own unique visual identity.
Spotify Mix is a sans-serif typeface designed in partnership with Dinamo Typefaces, a Berlin-based type design studio that has worked with major companies, including Burberry, Discord, Nike, Patreon and Tumblr, among others. Sans-serif fonts are simpler looking than serif fonts and are popular among many brands, including tech giants Google and Microsoft. The font type is also known to be more accessible because it’s easier to read on smaller devices.
Spotify describes the new font as a “combination of sharp angles and smooth curves,” which gives it a “distinctive character,” Spotify’s global head of brand design, Rasmus Wängelin, wrote in the blog post.
“To design this typeface, we broke free from traditional typographic constraints and merger elements from a variety of font styles. This approach mirrors the dynamic and evolving nature of audio culture over the years,” Wängelin added.
Spotify Mix replaces the current font used on the platform, Circular, which Swiss designer Laurenz Brunner created.
Image Credits: Spotify
Spotify Mix serves as an example for startups looking to establish a unique brand identity through the use of distinct font styles. While some may view a font change as minor, others believe that it has a substantial impact on how a business is perceived. A font like Comic Sans — widely considered to be the most disliked font due to its childish and unsophisticated nature — could evoke a strong, negative reaction from users, for instance.
Many major companies have undergone a font refresh to give their brands their own form of visual expression. In 2021, Twitter/X introduced its proprietary font, Chirp, to give it more personality and improve content legibility for users. When Instagram underwent a visual refresh, it introduced a new typeface. Microsoft’s ditching of Calibri as its default font in Office also made headlines. And years ago, when Google unveiled its new design language, Material Design, it included an updated version of its system font, Roboto.
Spotify Mix is gradually rolling out starting today and will continue to roll out over the next few weeks. It’s currently only available for content written in “all languages with Latin-based scripts, as well as Vietnamese,” the company said.
