Stock trade app Robinhood raising at $5B+, up 4X in a year

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By adding a cryptocurrency exchange, a web version and stock option trading, Robinhood has managed to quadruple its valuation in a year, according to a source familiar with a new round the startup is raising. Robinhood is closing in on around $ 350 million in Series D funding led by Russian firm DST Global, the source says. That’s just 11 months after Robinhood confirmed TechCrunch’s scoop that the zero-fee stock trading app had raised a $ 110 million Series C at a $ 1.3 billion valuation. The new raise would bring Robinhood to $ 526 million in funding.

Details of the Series D were first reported by The Wall Street Journal.

The astronomical value growth shows that investors see Robinhood as a core part of the mobile finance tools upon which the next generation will rely. The startup also just proved its ability to nimbly adapt to trends by building its cryptocurrency trading feature in less than two months to make sure it wouldn’t miss the next big economic shift. One million users waitlisted for access in just the five days after Robinhood Crypto was announced.

The launch completed a trio of product debuts. The mobile app finally launched a website version for tracking and trading stocks without a commission in November. In December it opened options trading, making it a more robust alternative to brokers like E*Trade and Scottrade. They often charge $ 7 or more per stock trade compared to zero with Robinhood, but also give away features that are reserved for Robinhood’s premium Gold subscription tier.

Robinhood won’t say how many people have signed up for its $ 6 to $ 200 per month Gold service that lets people trade on margin, with higher prices netting them more borrowing power. That and earning interest on money stored in Robinhood accounts are the startup’s primary revenue sources.

Rapid product iteration and skyrocketing value surely helped recruit Josh Elman, who Robinhood announced yesterday has joined as VP of product as he transitions to a part-time roll at Greylock Partners. He could help the company build a platform business as a backbone for other fintech apps, they way he helped Facebook build its identity platform.

In effect, Robinhood has figured out how to make stock trading freemium. Rather than charge per trade with bonus features included, Robinhood gives away the bare-bones trades and charges for everything else. That could give it a steady, scalable business model akin to Dropbox, which grew by offering small amounts of free storage and then charging for extras and enterprise accounts. From a start with free trades, Robinhood could blossom into a hub for your mobile finance life.

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Here’s why Spotify will go public via direct listing on April 3rd

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Spotify explained why it’s ditching the traditional IPO for a direct listing on the NYSE on April 3rd today during its Investor Day presentation. With no lockup period and no intermediary bankers, Spotify thinks it can go public without all the typical shenanigans.

Spotify described the rationale for using a direct listing with five points:

  • List Without Selling Shares  – Spotify has plent of money with $ 1.3 billion in cash and securities, has no debt since it converted that into equity for investors, and has positive free cash flow
  • Liquidity – Investors and employees can sell on public market and sell at time of their choosing without investors shorting a lockup expiration, while new investors can join in
  • Equal Access – Bankers won’t get preferred access. Instead, the whole world will get access at the same time. “No underwriting syndicate, no limited float, no IPO allocations, no preferential treatment”.
  • Transparency – Spotify wants to show the facts about its business to everyone via today’s presentation, rather than giving more info to bankers in closed door meetings
  • Market-Driven Price Discovery – Rather than setting a specific price with bankers, Spotify will let the public decide what it’s worth. “We think the wisdom of crowds trumps expert intervention”.

Spotify won’t wait for the direct listing, and on March 26th will announce first quarter and 2018 guidance before markets open. It also announced today that there will be no lock-up period, so employees can start selling their shares immediately. This prevents a looming lock-up period expiration that can lead to a dump of shares on the market that sinks the price from spooking investors.

It’s unclear exactly what Spotify will be valued at on April 3rd, but during 2018 its shares have traded on the private markets for between $ 90 and $ 132.50, valuing the company at $ 23.4 billion at the top of the range. The music streaming service now has 159 million monthly active users (up 29 percent in 2017) and 71 million paying subscribers (up 46 percent in 2017.

During CEO Daniel Ek’s presentation, he explained that Spotify emerged as an alternative to piracy by convenience to make paying or ad-supported access easier than stealing. Now he sees the company as the sole leading music streaming service that’s a dedicated music company, subtly throwing shade at Apple, Google, and Amazon. “We’re not focused on selling hardware. We’re not focused on selling books. We’re focused on selling music and connecting artists with fans” said Ek.

Head of R&D Gustav Soderstrom outlined Spotify’s ubiquity strategy, opposed to trying to lock users into a “single platform ecosystem”. He says Spotify does “what’s best for the user and not for the company, and trying to solve the users’ problems by being everywhere.” That’s more shade for Apple, who’s HomePod only works with Apple Music despite customers obviously wishing they could play other streaming services through it.

By now being baked into a wide range of third-party hardware through the Spotify Connect program, Soderstrom says Spotify gets a more holistic understanding of its listeners. He declared that Spotify has 5X as much personalization data as its next closest competitor, and that allows it to know what to play you next. He cheekily calls this “self-driving music”.

By directing what people listen to, Spotify becomes the new top 40 radio — the hit-maker. That gives it leverage over the record labels so Spotify can get better licensing deals and favorable treatment. Now over 30 percent of Spotify listening is based on its own programming through featured playlists, artists, and more.

Spotify CEO Daniel Ek giving the Investor Day presentation

Wall Street loves a two-sided marketplace, so Spotify is positioning itself in the middle of artists and fans, with each side attracting the other. It’s both selling music streaming services to listeners, and selling the tools to reach and monetize those listeners to musicians. That’s both on its platform, and using its targeting and analytics info to deliver efficient ticket and merchandise promotions elsewhere. Ek discussed the flywheel that drives Spotify’s business, explaining that the more people discover music, the more they listen, and the more artists that become successful on the platform, and the more artists will embrace the platform and bring their fans.

Yet with music catalogues and prices mostly similar across the industry, Spotify will have to depend on its personalized recommendations and platform-agnositic strategy to beat its deep pocketed competitors. Music isn’t going away, so whoever can lock in listeners now at the dawn of streaming could keep coining off them for decades. That’s why Spotify not raising cash for marketing through a traditional IPO is a strange choice. But with its focus on playlists and suggestion data, Spotify could build melodic handcuffs for its listeners who wouldn’t dream of starting from scratch on a competitor.

You can follow along with the presentation here.

For more on Spotify’s not-an-IPO, check out our feature piece:

Mobile – TechCrunch

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Facebook launches Express Wi-Fi app for its local-operated hotspots

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Facebook wants you to pay for internet. This week TechCrunch was tipped off that Facebook had quietly launched an Express Wi-Fi Android app in the Google Play store that lets users buy data packs and find nearby hotspots as part of Facebook’s distributed Wi-Fi network. The company’s Express Wi-Fi program is live in five developing countries that see local business owners operating Wi-Fi hotspots where people can pay to access higher-speed bandwidth via local telecoms instead of paying steep prices for slow cellular data connections.

Previously, Express Wi-Fi users had to dig out a mobile website, or directly download an app from a telecom that required reconfiguring a phone’s settings. There wasn’t any way to look up where hotspots were located. The new Google Play app can be downloaded the normal way. It’s now live in Indonesia with bandwidth from telecom partner D-Net, and in Kenya through Surf. The app can also tell if a user’s Wi-Fi is turned on to help with set up, and they can file reports to Facebook about connectivity or retailer issues.

The launch signals Facebook expanding its pursuit of developing world audiences that first need internet access before they can become lucrative Facebook users. Unlike its much-criticized zero-rating program called Free Basics (formerly, Express Wi-Fi offers a full, unrestricted version of the web for a price instead of only low-bandwidth services approved by Facebook. This strategy could help it achieve its mission of getting more disconnected people in the developing world online without the net neutrality concerns. Making Express Wi-Fi an actual business might save Facebook from backlash about it masking a user growth driver inside a philanthropic initiative.

Facebook confirmed the launch to TechCrunch, with a spokesperson telling us, “Facebook is releasing the Express Wi-Fi app in the Google Play store to give people another simple and secure way to access fast, affordable internet through their local Express Wi-Fi hotspots.” Sensor Tower first tipped us off to the app.

Weak or expensive connectivity is a huge barrier to Facebook deepening its popularity in the developing world at a time when it’s reaching saturation or even shrinking in some developed world nations. Facebook saw its first user loss ever in the U.S. and Canada region in Q4, with daily active users decreasing by 700,000 in part because of News Feed changes that reduced the presence of engagement-drawing viral videos.

Facebook needs user growth more than ever, and the developing world is where it can find it. That’s why it’s developing advanced technologies like the Aquila solar drone and satellites that can beam down connectivity. It’s also working with telecoms that use microwave towers to beam backhaul bandwidth to its Express Wi-Fi units.

Monetizing the international market has been a big focus for the company. It’s launched new region-specific and low-bandwidth ad units like click-to-missed-call and slideshows. It’s paid off. From 2012 to 2016, average revenue per user grew 4X in the Rest of World region. And that revenue grows even faster when people can load Facebook quickly and cheaply thanks to strong Wi-Fi access. The more accessible Facebook makes this program, the more it could see those internet users turn into social networkers.

Mobile – TechCrunch

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PUBG soft-launches on mobile in Canada with Android release

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Player Unknown’s Battlegrounds, the ‘battle royale’ style game where everyone tries to be the last player standing while scrounging for supplies to keep them alive, has launched on Android in Canada MobileSyrup reports, which could presage a future release in the U.S.

The arrival of the mobile version of the game more generally known as PUBG coincides with it reaching the 5 million player milestone on Xbox, where it’s been available since late last year after debuting on the PC in early access earlier in 2017. It’s not cross-play compatible, unlike Fortnite, however, so if you’re playing the Android version you’ll be matched up against others with the app, which is published by Chinese Internet giant Tencent.

This Android port wasn’t developed by original PUBG studio Bluehole, but they say they oversaw the creation of this mobile version. Based on early testing with a Pixel 2 XL, it looks and feels a lot like the original.

PUBG doesn’t have quite the hype of Fortnite right now, since that’s begun a cross-platform play mobile beta and also Drake just played a session with one of the most popular professional esports players in the world. But a mobile version close at hand (and available now, if you’re Canadian) is reason to get excited.

Mobile – TechCrunch

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The red-hot AI hardware space gets even hotter with $56M for a startup called SambaNova Systems

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Another massive financing round for an AI chip company is coming in today, this time for SambaNova Systems — a startup founded by a pair of Stanford professors and a longtime chip company executive — to build out the next generation of hardware to supercharge AI-centric operations.

SambaNova joins an already quite large class of startups looking to attack the problem of making AI operations much more efficient and faster by rethinking the actual substrate where the computations happen. While the GPU has become increasingly popular among developers for its ability to handle the kinds of lightweight mathematics in very speedy fashion necessary for AI operations. Startups like SambaNova look to create a new platform from scratch, all the way down to the hardware, that is optimized exactly for those operations. The hope is that by doing that, it will be able to outclass a GPU in terms of speed, power usage, and even potentially the actual size of the chip. SambaNova today said it has raised a massive $ 56 million series A financing round led by GV, with participation from Redline Capital and Atlantic Bridge Ventures.

SambaNova is the product of technology from Kunle Olukotun and Chris Ré, two professors at Stanford, and led by former SVP of development Rodrigo Liang, who was also a VP at Sun for almost 8 years. When looking at the landscape, the team at SambaNova looked to work their way backwards, first identifying what operations need to happen more efficiently and then figuring out what kind of hardware needs to be in place in order to make that happen. That boils down to a lot of calculations stemming from a field of mathematics called linear algebra done very, very quickly, but it’s something that existing CPUs aren’t exactly tuned to do. And a common criticism from most of the founders in this space is that Nvidia GPUs, while much more powerful than CPUs when it comes to these operations, are still ripe for disruption.

“You’ve got these huge [computational] demands, but you have the slowing down of Moore’s law,” Olukotun said. “The question is, how do you meet these demands while Moore’s law slows. Fundamentally you have to develop computing that’s more efficient. If you look at the current approaches to improve these applications based on multiple big cores or many small, or even FPGA or GPU, we fundamentally don’t think you can get to the efficiencies you need. You need an approach that’s different in the algorithms you use and the underlying hardware that’s also required. You need a combination of the two in order to achieve the performance and flexibility levels you need in order to move forward.”

While a $ 56 million funding round for a series A might sound massive, it’s becoming a pretty standard number for startups looking to attack this space, which has an opportunity to beat massive chipmakers and create a new generation of hardware that will be omnipresent among any device that is built around artificial intelligence — whether that’s a chip sitting on an autonomous vehicle doing rapid image processing to potentially even a server within a healthcare organization training models for complex medical problems. Graphcore, another chip startup, got $ 50 million in funding from Sequoia Capital, while Cerebras Systems also received significant funding from Benchmark Capital.

Olukotun and Liang wouldn’t go into the specifics of the architecture, but they are looking to redo the operational hardware to optimize for the AI-centric frameworks that have become increasingly popular in fields like image and speech recognition. At its core, that involves a lot of rethinking of how interaction with memory occurs and what happens with heat dissipation for the hardware, among other complex problems. Apple, Google with its TPU, and reportedly Amazon have taken an intense interest in this space to design their own hardware that’s optimized for products like Siri or Alexa, which makes sense because dropping that latency to as close to zero as possible with as much accuracy in the end improves the user experience. A great user experience leads to more lock-in for those platforms, and while the larger players may end up making their own hardware, GV’s Dave Munichiello — who is joining the company’s board — says this is basically a validation that everyone else is going to need the technology soon enough.

“Large companies see a need for specialized hardware and infrastructure,” he said. “AI and large-scale data analytics are so essential to providing services the largest companies provide that they’re willing to invest in their own infrastructure, and that tells us more investment is coming. What Amazon and Google and Microsoft and Apple are doing today will be what the rest of the Fortune 100 are investing in in 5 years. I think it just creates a really interesting market and an opportunity to sell a unique product. It just means the market is really large, if you believe in your company’s technical differentiation, you welcome competition.”

There is certainly going to be a lot of competition in this area, and not just from those startups. While SambaNova wants to create a true platform, there are a lot of different interpretations of where it should go — such as whether it should be two separate pieces of hardware that handle either inference or machine training. Intel, too, is betting on an array of products, as well as a technology called Field Programmable Gate Arrays (or FPGA), which would allow for a more modular approach in building hardware specified for AI and are designed to be flexible and change over time. Both Munichiello’s and Olukotun’s arguments are that these require developers who have a special expertise of FPGA, which a sort of niche-within-a-niche that most organizations will probably not have readily available.

Nvidia has been a massive benefactor in the explosion of AI systems, but it clearly exposed a ton of interest in investing in a new breed of silicon. There’s certainly an argument for developer lock-in on Nvidia’s platforms like Cuda. But there are a lot of new frameworks, like TensorFlow, that are creating a layer of abstraction that are increasingly popular with developers. That, too represents an opportunity for both SambaNova and other startups, who can just work to plug into those popular frameworks, Olukotun said. Cerebras Systems CEO Andrew Feldman actually also addressed some of this on stage at the Goldman Sachs Technology and Internet Conference last month.

“Nvidia has spent a long time building an ecosystem around their GPUs, and for the most part, with the combination of TensorFlow, Google has killed most of its value,” Feldman said at the conference. “What TensorFlow does is, it says to researchers and AI professionals, you don’t have to get into the guts of the hardware. You can write at the upper layers and you can write in Python, you can use scripts, you don’t have to worry about what’s happening underneath. Then you can compile it very simply and directly to a CPU, TPU, GPU, to many different hardwares, including ours. If in order to do work you have to be the type of engineer that can do hand-tuned assembly or can live deep in the guts of hardware there will be no adoption… We’ll just take in their TensorFlow, we don’t have to worry about anything else.”

(As an aside, I was once told that Cuda and those other lower-level platforms are really used by AI wonks like Yann LeCun building weird AI stuff in the corners of the Internet.)

There are, also, two big question marks for SambaNova: first, it’s very new, having started in just November while many of these efforts for both startups and larger companies have been years in the making. Munichiello’s answer to this is that the development for those technologies did, indeed, begin a while ago — and that’s not a terrible thing as SambaNova just gets started in the current generation of AI needs. And the second, among some in the valley, is that most of the industry just might not need hardware that’s does these operations in a blazing fast manner. The latter, you might argue, could just be alleviated by the fact that so many of these companies are getting so much funding, with some already reaching close to billion-dollar valuations.

But, in the end, you can now add SambaNova to the list of AI startups that have raised enormous rounds of funding — one that stretches out to include a myriad of companies around the world like Graphcore and Cerebras Systems, as well as a lot of reported activity out of China with companies like Cambricon Technology and Horizon Robotics. This effort does, indeed, require significant investment not only because it’s hardware at its base, but it has to actually convince customers to deploy that hardware and start tapping the platforms it creates, which supporting existing frameworks hopefully alleviates.

“The challenge you see is that the industry, over the last ten years, has underinvested in semiconductor design,” Liang said. “If you look at the innovations at the startup level all the way through big companies, we really haven’t pushed the envelope on semiconductor design. It was very expensive and the returns were not quite as good. Here we are, suddenly you have a need for semiconductor design, and to do low-power design requires a different skillset. If you look at this transition to intelligent software, it’s one of the biggest transitions we’ve seen in this industry in a long time. You’re not accelerating old software, you want to create that platform that’s flexible enough [to optimize these operations] — and you want to think about all the pieces. It’s not just about machine learning.”

Mobile – TechCrunch

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John Chen to stay on as BlackBerry CEO through 2023

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BlackBerry today announced it reached an agreement to keep CEO John Chen in his current position through 2023. Chen joined the company in 2013 and is responsible for leading the company’s recovery as it left smartphones and embraced services.

When Chen took over the company, the company was struggling on all fronts. Its time as the smartphone leader was done but it still had a strong brand in key markets. Chen lead the company to a modest turn around and has seemingly found its footing. The company stock is up 89.9% over the last 12 months and nearly level with the stock price when Chen took over during its decline five years ago.

“The BlackBerry Board of Directors has tremendous confidence in John Chen . John engineered a successful turnaround and has the company repositioned to apply its strengths and assets to the Enterprise of Things, an emerging category with massive potential,” said Prem Watsa, Lead Director and Chair of the Compensation, Nomination and Governance Committee of the BlackBerry Board, in a released statement. “John’s leadership is critical and the Board has determined that it is in the best of interests of BlackBerry and its shareholders to continue his service through November 2023.”

Going forward Chen’s compensation is weighted towards longterm goals. His salary will stay the same. He will be award 5 million restricted share units vested over five years if and when the company’s share price amounts from USD $ 16 to $ 20. A performance-based cash award will vest and become available if the company’s share price hits $ 30, resulting in BlackBerry’s market capitalization hitting $ 16.1 billion, an increase of 134% from current levels.

It’s painful to watch iconic companies die. BlackBerry was dying and Chen managed to keep the boat afloat through cuts and redirection. If there’s anyone who’s able to keep the company moving forward, it’s John Chen and BlackBerry’s board clearly felt he was the right person for the job.

Mobile – TechCrunch

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Samsung Galaxy S9: what’s new

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Want to know whether the Samsung Galaxy S9 is worth picking up when it arrives March 16? Good news: I’ve got 4,000 words on the matter that you can read over here. For those who don’t have the time to take all of that in, however, we’ve also put together this handy guide to the biggest new additions to the handset over last year’s S8.

The new features of mostly good, sometimes great and occasionally creepy (I’m looking at you, AR Emojis). But all told, they add up to yet another solid flagship from the world’s leading smartphone maker.

Mobile – TechCrunch

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Microsoft Pix can scan business cards to your contacts, find people on LinkedIn

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LinkedIn used to have its own business card scanning app, CardMunch, which served a useful purpose in a world where paper cards simply refuse to die. But that app was shut down back in 2014, with LinkedIn suggesting users move to Evernote instead. Today, Microsoft is bringing back business card scanning – but this time, not with a dedicated card scanner app, but with its multipurpose, A.I.-powered camera app, Microsoft Pix.

Since its launch in 2016 as an iOS app that helps you take better pictures, Microsoft has increasingly found more productivity-related uses for Pix. In September, for example, the app was updated to include a way to snap better photos of documents, post-its, whiteboards, and yes, business cards.

But with today’s update, Pix’s business cards smarts are being upgraded – this time with a LinkedIn integration. In the latest version of the iOS app, Pix includes a new business card feature that will add new contacts both to your iPhone’s address book, as well as to your LinkedIn account.

To take advantage of this option, you just launch the app and point it at the business card. Pix then automatically detects what it’s seeing, and asks you if you want to “Add Contact” or “Find on LinkedIn.”

When you tap to add the contact, Pix captures and organizes the contact information – like name, phone, address, and URL – into the correct fields, and adds the newly created contact to your iPhone’s Contacts app. If you opt for LinkedIn, you’re able to view the person’s profile in the LinkedIn app on your iPhone, and optionally add them to your list of connections.

The business card scanning feature, like others in Pix, leverages A.I. technology under the hood to enhance and improve the image. In the case of business cards, Pix is able to detect the edges of the cards, sharpen focus, and tweak the angle of the photo to render the image in a straight-on perspective so it can extract the information from the card.

The Pix update is just one of several ways Microsoft has integrated with LinkedIn since acquiring the company for $ 26.2 billion in 2016. It has also tied LinkedIn into its other products, including Office 365,, Dynamics 365, Word, and Windows 10.

The updated version of Microsoft Pix is rolling out today. You may not have it yet, as it has to propagate across the App Store, so keep your eyes peeled.

Mobile – TechCrunch

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Spotify tests native voice search, groundwork for smart speakers

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Now Spotify listens to you instead of the other way around. Spotify has a new voice search interface that lets you say “Play my Discover Weekly,” “Show Calvin Harris” or “Play some upbeat pop” to pull up music.

A Spotify spokesperson confirmed to TechCrunch that this is “Just a test for now,” as only a small subset of users have access currently, but the company noted there would be more details to share later. The test was first spotted by Hunter Owens.

Voice control could make Spotify easier to use while on the go using microphone headphones or in the house if you’re not holding your phone. It might also help users paralyzed by the infinite choices posed by the Spotify search box by letting them simply call out a genre or some other category of songs. Spotify briefly tested but never rolled out a very rough design of voice controls a year ago.

Down the line, Spotify could perhaps develop its own voice interface for smart speakers from other companies or that it potentially builds itself. That would relieve it from depending on Apple’s Siri for HomePod, Google’s Assistant for Home or Amazon’s Alexa for Echo — all of which have accompanying music streaming services that compete with Spotify.

Spotify is preparing for a direct listing that will make the company public without a traditional IPO. That means forgoing some of the marketing circus that usually surrounds a company’s debut. That means Spotify may be even more eager to experiment with features or strategies that could be future money-makers so that public investors see growth potential. Breaking into voice directly instead of via its competitors could provide that ‘x-factor.’

For more on Spotify’s not-an-IPO, check out our feature story:

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Snapchat and Instagram remove Giphy feature due to racial slur GIF

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Snapchat and Instagram have temporarily removed their Giphy GIF sticker features after users saw an extremely racist GIF as an option to add to their images. Snapchat confirms to TechCrunch “As soon as we were made aware, we removed the GIF and have disabled Giphy until we can be sure that this won’t happen again . . . while we wait for Giphy’s team to take a look at it.”

A source tells TechCrunch the same racist GIF was spotted in Instagram as well, indicating that Giphy is at fault. A tweet by Lyauna Augmon shows the GIF being used within Instagram. Giphy appears to have removed the GIF as it’s no longer available in Instagram. An Instagram spokesperson tells TechCrunch “This type of content has no place on Instagram. We have stopped our integration with Giphy as they investigate the issue.” The company confirms the change has been made but might take some time to propagate to all users.

[Update: This article has been updated to show that the GIF also appeared on Instagram, not just Snapchat.]

The Snapchat spokesperson says that all GIFs in Snapchat are meant to be “rated PG,” meaning they’re mostly suitable for the 13-and-up teens that are technically allowed on Snapchat.

The GIF includes disturbing text including a racial slur, which TechCrunch has blurred out below. It reads “N—– Crime Death Counter – Keep Cranking Bonzo, the Numbers Just Keep on Climbing!” TechCrunch received a screenshot of the GIF on Snapchat from a reader. Warning: The image below may be disturbing to some:

Snapchat’s official statement is “We have removed GIPHY from our application until we can be assured that this will never happen again.” A Snapchat spokesperson tells me the company is very sorry. The Giphy community guidelines prohibit this kind of objectionable content in the first place, but since it works like a search engine that indexes the top GIFs on the web, things can slip through.

Here’s the version spotted on Instagram, censored by TechCrunch:

We’ve reached out to Giphy for comment but haven’t heard back.

[Update 3/10: Giphy has now provided a statement to TechCrunch, admitting it was to blame for a bug allowing the offensive GIF through. A spokesperson tells us:

“A user discovered an offensive GIF sticker in our library, and we immediately removed it per our content guidelines.

After investigation of the incident, this sticker was available due to a bug in our content moderation filters specifically affecting GIF stickers.  We have fixed the bug and have re-moderated all of the GIF stickers in our library.

The GIPHY staff is also further reviewing every GIF sticker by hand and should be finished shortly.

We take full responsibility for these recent events and sincerely apologize to anyone who was offended.”

Snapchat only launched the Giphy integration on February 20th so people could jazz up their photos and videos with moving images curated as safe by the Giphy team. TechCrunch broke the news on Instagram building a similar Giphy integration in late January, which launched a week later.

This isn’t Snapchat’s first run-in with racist content. Back in 2016 it was heavily criticized for creating an Asian “yellowface” stereotype augmented reality lens that gave people slanted eyes. Snapchat risks an unsavory reputation if it can’t keep its content under control. The slip-up could deter Snapchat from working more with outside developers, which it’s only recently allowed to bring content into its app via its Lens Studio and the Giphy integration.

The incident is embarrassing for Instagram’s parent company Facebook. It also casts doubt on Facebook’s Messenger Kids app, which also has Giphy integration that is only supposed to show G-rated imagery.

Snapchat and Instagram will have to decide whether they want help from outsiders even if it can’t guarantee the quality or safety of their content, or whether it will go it alone as they compete against each other.

Mobile – TechCrunch

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