WeWork, the co-working empire once valued at $47 billion before reality struck, plunging the business and its investors into crisis, has another problem to add to its growing pile — one which doesn’t exactly reflect well on its core business of kitting out and maintaining modern working environments.
The problem is a safety concern affecting users of WeWork co-working spaces in the U.S. and Canada. Today the company emailed members in the regions to warn that around 1,600 phone booths installed at WeWork locations have been found to have elevated levels of formaldehyde — which it warns could cause health issues for people exposed to the gas.
WeWork blames the issue on a manufacturer of the booths.
The booths are provided in its co-working spaces for WeWork members to be able to take calls in private — given other common areas are shared by all users.
“After a member informed us of odor and eye irritation, WeWork performed an analysis, including having an outside consultant conduct a series of tests on a sampling of phone booths. Upon receiving results late last week, we began to take all potentially impacted phone booths out of service,” it writes in an email to members.
Affected phone booths “are being taken out of service immediately, and will be removed from your location as soon as possible,” it adds.
In addition to ~1,600 booths it has confirmed are affected, a further 700 booths are being taken out of service in what WeWork describes as “an abundance of caution” — i.e. while it carries out more checks — with the promise of a further update once it has concluded its tests.
Members wanting to know which booths are safe to use in the meanwhile are told to contact the community team at their WeWork location.
WeWork also says alternative quiet spaces will be provided, such as in conference rooms and unused offices.
Discussing the health risks of formaldehyde gas — a chemical which is used in various building materials –WeWork’s email warns: “Short-term exposure to formaldehyde at elevated levels may cause acute temporary irritation of the nose, throat, and respiratory system, including coughing or wheezing. These effects are typically transient and usually subside after removal of the formaldehyde source.
“Long-term exposure to formaldehyde, such as that experienced by workers in jobs who experience high concentrations over many years, has been associated with certain types of cancers. You can find additional information in this FAQ from the Occupational Safety and Health Administration.”
The email encourages any WeWork members with health concerns to contact a doctor.
A tipster who sent us the email reported experiencing a sensation of “burning eyes” after using the booths.
They also said several people in their team had experienced the same issue.
“Some complained that they felt nauseous after spending time inside the booths,” the tipster wrote. “I never felt that, but the burning eyes was 100% there for me several times. Scary stuff.”
Reached for comment, a WeWork spokesperson confirmed the formaldehyde issue, saying it’s taking “a number” of booths out of service at “some” locations in the U.S. and Canada — due to “potentially elevated levels of formaldehyde caused by the manufacturer.”
“The safety and well-being of our members is our top priority, and we are working to remedy this situation as quickly as possible,” it adds in a statement.
It is not clear exactly how many WeWork locations contain affected booths at this point.
Nor has WeWork provided more detailed information about how long members might have been exposed to elevated levels of formaldehyde — with its email merely suggesting some of the booths have been in place for “months.”
“The potentially impacted phone booths have been installed over the past few months, exact timing varies based on location,” it writes.
Although clearly the level of exposure will vary from person to person depending on their use of the booths.
The company did not respond to a question asking whether any of its international WeWork locations are affected by the issue.
Fortnite just blew up its entire map and all that’s left is a black hole.
Some are speculating that this is simply a teaser for a new Fortnite map, but it’s unclear when that new map will arrive. On Epic Games’ status page, it says Fortnite is currently experiencing a minor service outage, noting “anomaly detected.”
As Kotaku reports, players this morning were only able to access a team fight mode called “The End.” That led to a massive explosion that resulted in a black hole.
Fortnite’s website is currently just a Twitch stream featuring a black hole.
The Pixel 4 is set to be unveiled at an event on Tuesday. This much we know for sure. We know a bunch more, too, (as outlined in this rumor roundup from yesterday), thanks to both official reveals and unofficial leaks. How much of this was planned is hard to say, but Google seemingly doesn’t mind building up the hype cycle.
Earlier today, Best Buy Canada made what may well be the most egregious reveal today (granted, there are three more days left to leak). The big box store posted up a preorder page for the upcoming smartphone. As expected, the listing was taken down, but not before 9to5Google managed to snap some screen shots.
From the looks of things, the rumors are pretty spot on. The device will come in both standard and XL versions, at 5.7 and 6.3 inches, respectively. Both models sport a Snapdradon 855, 6GB of RAM and 64GB of storage, along with a new Face Unlock feature. There are dual camera on each, per the listing — 12 and 16 megapixels — in the iPhone 11-esque square configuration.
There’s a single front-facing 8 megapixel camera on each, and a 2,800 and 3,700mAh battery on the Pixel 4 and Pixel 4 XL. Other highlights including the expected addition of “Quick Gestures,” which use use a wave of the hand to interact with the device — similar to features we’ve seen on other handsets before.
Conspicuously missing from the preorder, however, is the expected “Oh So Orange” color. Could be a preorder thing or maybe Best Buy Canadian customers will have to settle for Just Black and Clearly White. Maybe the company is saving some surprises for Tuesday’s event. Maybe.
Oof — a week after PayPal announced plans to part ways with Facebook’s Libra cryptocurrency project and the related association of the same name, three more names are reportedly breaking away: eBay, Stripe, and Mastercard.
In a comment to TechCrunch, a Stripe spokesperson says:
“Stripe is supportive of projects that aim to make online commerce more accessible for people around the world. Libra has this potential. We will follow its progress closely and remain open to working with the Libra Association at a later stage.”
Word of eBay’s exit comes via Reuters, which quotes an eBay spokesperson as saying:
“We highly respect the vision of the Libra Association; however, eBay has made the decision to not move forward as a founding member”
Mastercard’s looming departure, meanwhile, just broke in the WSJ.
This is a fairly massive hit for the project, with three flagship partners all bailing simultaneously. It all happens just days after reports that regulatory pressure behind the scenes was causing a number of members to reconsider their support.
Rocket Lab has received a new 5-year Launch Operator License from the Federal Aviation Administration, which grants it permission to do multiple launches of its Electron rocket from its LC-1 launch site in New Zealand without having to seek individual clearance for each one. While not the only limiting factor, this should help Rocket Lab increase the frequency of its launches form LC-1, servicing more customers more often for commercial small satellite customers.
Until now, Rocket Lab has had to seek out a license (or multiple licenses) from the FAA for each individual rocket it flew – the company has seemingly managed that process just fine to date, but it’s an added process that probably adds a lot of time and effort to each launch attempt, even if it hasn’t directly flummoxed any mission to date.
Rocket Lab says that this will provide a “streamlined path to orbit” for its customers, however, which should make it easier for the company to operate its flexible model that is designed to work better with the shifting timelines of small sat startups and younger commercial space companies, while still ensuring that Rocket Lab’s launch capacity is used to maximum effect. Rocket Lab just recently swapped one payload for another for an upcoming launch, for example.
Rocket Lab is part of the Commercial Spaceflight Federation, an industry consortium that also includes SpaceX, Virgin Galactic, Relativity Space and others that is petitioning the FAA for reforms to regulations that would update them to better suit the current state of the commercial space business. SpaceX CEO Elon Musk recently praised the FAA as a partner that it’s been able to work with very efficiently, speaking specifically about the licensing process regarding its ongoing Starship test program.
This license isn’t tied to the agency’s overall process for licensing U.S.-based launches (LC-1 is in New Zealand, after all) but it is another indication that the current FAA is more than willing to work with younger commercial space companies to ensure they can do business in an efficient manner.
The Richard Branson-backed small satellite launch operation Virgin Orbit wants to be the first to dedicate a mission to bringing commercial cube sats to the red planet, the company announced today. Working with Polish satellite company SatRevolution, Virgin Orbit has established a consortium along with a group of Polish academic institutions to jointly work on at least one, and as many as three small satellite launches to Mars, with the first one expected to happen as soon as three years from now.
The consortium is working to follow in the footsteps of the NASA Jet Propulsion Laboratory’s MarCO mission from 2018, which saw two smaller satellites launched to Mars successfully. The group’s early studies have suggested that even satellites as small as 50 kg (around 110 lbs) or potentially even smaller can provide meaningful and useful research, including imagery collection, from both Mars and its orbiting body Phobos. These satellites could provide key info about the atmospheric composition of Mars, or even scouting for underground water, Virgin Orbit says.
Warsaw-based SatRevolution has experience in the commercial space industry, and in April this year sent Poland’s first commercial nano satellite into orbit. The universities involved, which include the AGH University of Science and Technology, Wroclaw University of Science and Technology, and many others, all have experience in space industry research as well. The plan is to launch the spacecraft developed by the universities and SatRevolution aboard Virgin’s LauncherOne rocket, which takes off from a converted 747-400 Virgin has retrofitted for the process.
Virgin Orbit is aiming to have its first orbital rocket launch later this year, and is currently going through the final round of testing before that happens. The company ran a successful drop test earlier this year, during which it let a non-functional rocket fall from the wing of the 747 launcher aircraft in a key test, and it’s been signing contracts to launch from the UK as early as next year.
Few can hold a candle to Brad Feld’s list of accolades in the startup, tech and venture world. As a multi-time founder of both startups and venture firms alike, Feld is widely known for having co-founded the Techstars accelerator — now a Silicon Valley and startup institution — as well as Foundry Group, the early and growth stage venture fund that has raised nearly $2.5 billion over seven funds, in just over a decade.
Feld is equally, if not more, recognized outside of the investing world as a thought leader through both his widely followed blog “Feld Thoughts” and through authoring a number of books and guides to the startup and venture worlds. Feld recently published the fourth edition of his acclaimed and seemingly timeless book “Venture Deals: Be Smarter Than Your Lawyer And Venture Capitalist” (which he co-authored with Foundry Group co-founder Jason Mendelson), which acts as a manual to raising venture capital by walking through tactical advice around negotiating a term sheet, what to consider when selling your business, arguments for and against convertible debt, and much more.
TechCrunch’s Silicon Valley editor Connie Loizos will be sitting down with Brad for an exclusive conversation this Thursday, October 10th at 11:00 am PT on Extra Crunch. Brad, Connie and Extra Crunch members will be digging into the latest edition of “Venture Deals”, Brad’s advice to founders and investors, and his take on hot button issues of the day (including dual-class shares, direct listings, and what happened at WeWork).
Extra Crunch members will also have the opportunity to ask questions! We will pause during the call to take questions from Extra Crunch subscribers. Alternatively, you can email questions to email@example.com.
Tune in to join the conversation and for the opportunity to ask Brad and Connie any and all things venture.
To listen to this and all future conference calls, become a member of Extra Crunch. Learn more and try it for free.
By now, you’ve probably heard about the tweet heard ‘round the world, or at least, the part of the world where Mandarin is spoken. The GM of the Houston Rockets basketball franchise wrote a tweet — since deleted — supporting the democracy protesters that have lit up Hong Kong these past few weeks.
As Eben Novy-Williams of Bloomberg wrote, “Through decades of painstaking deal-making, the NBA created a multibillion-dollar opportunity in China, the world’s second-largest economy. Now a single swiftly deleted tweet has put all that time and money in jeopardy.”
It’s a situation that’s becoming increasingly typical for American companies, technology or not. Apple pulled the Taiwanese flag emoji from keyboards in Hong Kong and Macau this weekend, lest it lose its lucrative, mostly-iPhone market that accounted for $10 billion in revenues in its last quarter. US-headquartered airliners had to change the pulldown options in their checkout flows to avoid mentioning Taiwan last year, lest they lose access to Chinese airspace.
One wonders what kind of a business empire can collapse with a single dropdown menu item?
Or a single emoji?
Or a single tweet?
Businesses are not supposed to be this brittle, but American companies continue to approach the mirage of the Chinese economy as if it is open for the taking, and that the American consumer (and their representatives in Washington) are going to continue to ignore the “authoritarian straddle” these companies have to undertake to appease Beijing while trying to not displease Washington.
Despite all evidence to the contrary that such a straddle is impossible though, they keep on coming.
Just this past week, PayPal announced that it was entering mainland China through its acquisition of GoPay, becoming the first foreign payments provider in the highly-digitalized economy. Over the past year, MSCI, the creator of some of the most important stock indices in the world, has increasingly shifted weight to Chinese stocks, sending billions of dollars to mainland companies.
What is surprising is that this whole rise-and-fall, can-we-get-in-and-stay-in story was already written by Google almost exactly a decade ago. Google worked hard for years to cement itself on the mainland, but following a series of hacks that targeted political dissidents using its Gmail service, Google announced that it was leaving the country in 2010, redirecting users to its Hong Kong search engine.
Since that decision, Google has had very little access to mainland China, nor have any other prominent American tech companies. The one notable exception has been LinkedIn, which has engaged in aggressive censoring of speech in China in order to keep the lights on (although, given the speech I read on LinkedIn, one wonders whether a complete blackout in America wouldn’t do us all a favor).
As much as Google’s executives (and its shareholders) may have wanted to re-enter China though, it seems obvious that the enforced lack of access has ultimately been a godsend for the company’s policy decisions. For a decade, it barely had to handle the authoritarian straddle, and could center itself on individual choice, open access to the internet, and freedom of speech with minor reservations.
Sure, the economic mirage of China continued, and even Google couldn’t maintain its patience, attempting to launch its Project Dragonfly censored Chinese search engine to much outcry, ultimately to shelve it, giving its leadership a bit of a black eye. But Google is now out of the authoritarian straddle once again — and out of harms way. That ultimately is the solution that the NBA needs.
Beijing has its rules. Google, United Airlines, the NBA, and even Apple has no sway over them. Not even tens of billions of dollars of threatened tariffs from the Trump administration have made a dent in any of the CCP’s policies.
Maybe it’s time to take the hint, pack the balls up, and walk home.
In a wide-ranging conversation at TechCrunch Disrupt San Francisco last week, Postmates co-founder and chief executive officer Bastian Lehmann made light of the company’s lack of IPO documents.
The San Francisco-based on-demand delivery business was expected to publicly file its IPO prospectus in September in preparation for a fall exit, sources familiar with the matter told TechCrunch this summer. September, however, has come and gone and we’re still waiting on Postmates to release the critical document.
“The reality is that we will IPO when we believe we find the right time for the business and the right time for the markets,” Lehmann told TechCrunch. “And if you look at the markets right now, I believe they are a little choppy. They are a little choppy when it comes to growth companies specifically … We are hopeful that we find a good window to get out there.”
Lehmann made reference to Uber and other companies to recently float, citing market conditions as an IPO deterrent. Uber, Lyft, Slack and other fast-growing unicorns have struggled since entering the public markets earlier this year despite sky-high private market valuations. WeWork, a money-losing endeavor, recently decided to delay its IPO after demand from Wall Street devalued the business by the billions. Whether Postmates will complete its debut by the end of the year is unclear.
Postmates confidentially filed with the U.S. Securities and Exchange Commission for an IPO in February. Shortly after, Postmates held M&A talks with DoorDash, another food delivery unicorn, according to people familiar with the matter, but failed to come to mutually favorable terms. DoorDash has previously declined to comment on these reports. On stage last week, Lehmann declined to confirm the reports.
“I don’t think it does any good to speculate on M&A,” he said. “I think you have four well-funded players here in the U.S. in this space. I think everyone is well aware of the strengths and the weaknesses of each other and you know at some point down the line, if we take Europe for example, you will see consolidation in the market. People have conversations all the time but I wouldn’t read too much into it.”
Postmates operates its on-demand delivery platform, powered by a network of local gig economy workers, in more than 3,500 cities across all 50 states. The company does not yet operate in any international markets aside from Mexico City, however, Lehmann’s comments suggest the business could be plotting a foray into Europe, where Deliveroo, Just Eat and others dominate the market.
Postmates has raised about $900 million to date, including a $225 million round announced last month that valued the company at $2.4 billion. DoorDash, on the other hand, reached a $12.6 billion valuation in May with a $600 million Series G and has raised more than double that of Postmates. When asked why DoorDash, a similar and competing business, needed that much more capital, Lehmann joked “Maybe [DoorDash CEO Tony Xu] needs a jet, I don’t know.”
Postmates, founded in 2011 by Lehmann, is backed by Spark Capital, Founders Fund, Uncork Capital, Slow Ventures, Tiger Global, Blackrock and others. In our interview with Lehmann, the long-time CEO discussed the ‘choppy’ public markets, competitors, the company’s autonomous robotics delivery efforts and more.
Adam Neumann may be out of the daily flow of WeWork, but he seemingly remains top of mind to some of the company’s bankers.
According to a new Business Insider piece, Neumann is working with JPMorgan, UBS, and Credit Suisse to consider new terms for a $500 million loan that he took out before WeWork filed to go public, and from which Neumann has already drawn down $380 million. Since he can no longer pay the loan with proceeds from selling WeWork shares publicly (it yanked its S-1 filing earlier this week), he may have to put up some of his properties or other assets as collateral for the loan, according to one of BI’s sources.
“No terms have been set,” a spokeswoman for Neumann tells the outlet.
Per earlier reports, Neumann has plenty to offload if it comes to it, having acquired numerous residential and commercial properties over the years.
Among his reported investments is a $10.5 million Greenwich Village townhouse; a farm in Westchester, New York; a home in the Hamptons where he reportedly weathered the storm with his family ahead of resigning as CEO last week; and a $21 million, 13,000-square-foot house in the Bay Area with a guitar-shaped room.
According to an earlier WSJ report, Neumann has also bought several commercial properties through investor groups that he had leased back, in some cases, to WeWork.
WeWork, and Neumann, have both enjoyed a close relationship with JPMorgan in recent years. As recently reported in the NYTimes, JPMorgan “lent Mr. Neumann money personally (with his inflated shares as collateral), provided equity and debt for the company, served as a corporate adviser for the I.P.O. and secured nearly $6 billion in financing as part of the now scotched offering.”