Top tech startup news for Tuesday, April 25, 2023: Binance, Coinbase, Rapid, SendBird, Spotify, and Temu
Good evening! Below are some of the top tech startup news stories for Tuesday, April 25, 2023.
RapidAPI, an Israeli tech startup valued at $1 billion a year ago, is laying off 50% of its workforce
Rapid API, a provider of API marketplace valued at $1 billion just a year ago, is laying off 50% of its workforce, according to a report by TechCrunch, citing people familiar with the matter. The job cut is part of “a significant restructuring” as part of the effort to “right-size the company,” CEO Marc Friend said in the email to the company’s employees viewed by TechCrunch.
Friend also explained that Rapid tried “to compete on too many fronts” as a product company. Friend took over the position of chief executive just last week, while CEO and founder Iddo Gino transitioned to the role of technical advisor.
In the email, Friend said: “We have grown large as an organization and often sacrificed agility. Moving forward, we will be disciplined on our product focus and ruthless about customer success.” Friend only last week took over the role of chief executive of the company. CEO and founder Iddo Gino is now a technical advisor, per a company announcement.
An insider familiar with the company’s internal operations reported that the recent layoffs affected around 115 employees located across Europe, Tel Aviv, and San Francisco. The CEO’s email, which was sent on Monday, only stated that a substantial number of workers would be let go within the following days. The layoff wave has reportedly affected personnel from various departments, such as sales, talent acquisition, engineering, product, and marketing.
Rapid was founded in 20215 by Iddo Gino and Mickey Hasalvsky. The Israel startup provides a platform that allows developers to easily find, use, manage, and collaborate application programming interfaces (APIs). Rapid also helps businesses discover and integrate third-party APIs, as well as manage their internal APIs’ usage.
Spotify passes 500 million monthly active users for the first time
Spotify reached a new milestone, crossing more than 500 million monthly active listeners. Spotify reported on Wednesday that its audio streaming service is being used by over 515 million people every month, which is more than half a billion users.
The growth is an increase of 22 percent compared to last year or 5 percent versus last quarter. Spotify said the user growth exceeded its guidance by 15 million, with CEO Daniel Ek commenting that the results represented the service’s second-largest quarter of user growth in its history. Paid subscribers, meanwhile, now sit at 210 million, a 15 percent increase year-over-year.
The news comes just a month after a report back in March that the audio streaming giant crossed 500 million monthly active listeners following a major app redesign with vertical feeds to help drive users to discover new content.
In a Twitter post, Ek said last quarter was the company’s “strongest Q1 since going public in 2018 and the second largest quarter of MAU growth” in the company’s history.
During the quarter, Spotify focused on streamlining and cost-cutting, and the audio-streaming company achieved a significant milestone. In late January, the company announced a reduction of nearly 600 staff, which accounted for 6 percent of its global workforce. Additionally, Spotify recently disclosed the shutdown of some side projects, such as its Clubhouse-style Spotify Live audio app and Wordle-style music game, Heardle. CEO Daniel Ek emphasized during the company’s latest earnings call that “speed and efficiency” are the top priorities for Spotify in 2023.
Unicorn startup SendBird launches no-code chatbots powered by ChatGPT for web and mobile apps
Sendbird today announced the launch of ‘Sendbird with ChatGPT,’ a new low-code chat API that will open up a world of possibilities for web and mobile chat app developers, as well as product managers, who can now quickly tap into the power of generative AI.
The new chatbot API debuts as 1,200 apps are currently built on top of Sendbird APIs, enabling more than 7 billion messages every month, the new chatbot API makes its debut. Adding an intelligent chatbot on top could increase user engagement and message volume. With the API serving as middleware, online organizations may now integrate a chat and useful bots into a variety of industry verticals, such as marketplaces, healthcare, financial services, on-demand, education, and more.
Sendbird developed the new API to take chatbot interactions to the next level, with personalized and intelligent responses previously only possible with humans. The prior generation of chatbots suffered from being too scripted and inflexible. Sendbird with ChatGPT, by contrast, creates a human-like chat experience that brands can enrich with first-party data for additional personalization. Businesses can ingest valuable information from prior conversations and Customer Relationship Management (CRM) software data to the ChatGPT prompts to drive more relevant responses.
For example, a healthcare company can streamline doctors’ appointment scheduling while considering each party’s availability, a Fintech app can create a financial bot to answer users’ various queries on their spending, and a marketplace can assist support agents with past conversations’ summaries and offer intelligent suggestions to greet and farewell customers.
The result is an improvement in efficiency and brand perception, as customers feel a deeper sense of care that drives loyalty. Sendbird already sees such results with its new Salesforce Connector, in which its ChatGPT Summarize feature synthesizes customer cases to enable a new agent to take over quickly.
Coinbase sues the SEC just a week after it threatened to leave the US market
Last week, crypto exchange Coinbase said it may leave the US market if the regulatory uncertainty surrounding digital currencies continues. CEO Brian Armstrong told the audience at Fintech Week in London. The exchange has been in a legal tussle with the U.S. Securities and Exchange Commission (SEC) since last year.
But after months of silence from the federal regulator, Coinbase decided to take legal action against the agency. The crypto exchange is now asking a federal judge to force the SEC to share its answer on the company’s July 2022 petition on “whether existing securities rule-making processes could be extended to the crypto industry,” CNBC reported.
Despite the SEC’s recent enforcement actions against individuals and entities in the crypto industry, the July 2022 petition did not elicit a specific public response from the regulatory body. However, in March, the SEC issued a Wells notice to Coinbase, signaling the possibility of enforcement action against the exchange.
The petition asked that the SEC “propose and adopt rules to govern the regulation of securities that are offered and traded via digitally native methods,” referring to digital assets like cryptocurrencies.
While the SEC did not provide a specific public response to Coinbase’s petition, the regulatory body has significantly increased its enforcement actions and warnings against crypto exchanges, including Coinbase, in recent months. Coinbase’s Chief Legal Officer also took to social media to announce the lawsuit.
E-commerce platform startup Temu expands to Europe, following its successful U.S. launch
Following a successful US launch in September, Temu has expanded into the European market and has started selling to European customers including France, Germany, Italy, The Netherlands, Spain, and the United Kingdom, Reuters reported.
In addition to the previously available markets of the United States, Canada, Australia, and New Zealand, the Temu.com website now displays all of these markets on its location drop-down menu.
Known for its rock-bottom prices, the launch of Temu is Pinduoduo’s attempt to replicate the global success of its online fashion retailer Shein. Just like Walmart, the low prices could woo some Americans that are addicted to low prices.
Temu has made a big splash since launching in the United States last September, selling shoes, jewelry, beauty accessories, and home goods, most of which come from overseas, especially from China. Temu said shipping to the U.S. could take 7-15 business days. But the wait could be worth it. For example, Temu offers dresses for as low as $6 and an $8 handbag and $10 sneakers. Shipping is also free for orders over $49.
Temu’s cross-border approach drove Shein, which delivers to more than 150 countries, to become the world’s largest fast-fashion brand, with more than $58.5 billion in annual sales.
According to mobile intelligence firm Sensor Tower, Temu, which is located in Boston, witnessed 19 million U.S. downloads in the first quarter of this year. Temu is also the most downloaded software on the Apple and Google Play stores in the United States.
Binance.US backs out of a $1.3 billion deal to purchase Voyager’s assets
Binance.US has terminated a $1.3 billion deal to buy assets of bankrupt crypto lender Voyager Digital for in a $1.3 billion deal., citing a “hostile and uncertain regulatory climate.” The news comes following a WSJ report that Binance.US was struggling to find a new banking partner following the collapse of Signature Bank.
In a court filing on Tuesday, lawyers representing Voyager stated in a court submission that the company is asserting its rights over a $10 million good-faith deposit paid by Binance.US to Voyager, along with a reverse-termination fee owed by Binance.US.
“The hostile and uncertain regulatory climate in the United States has introduced an unpredictable operating environment impacting the entire American business community,” a spokesperson for Binance.US said in a statement. “We are focused on creating a safe platform where our customers can participate in the digital asset economy.” The company also said in a tweet on Tuesday:
“Binance.US has made the difficult decision to exercise its right to terminate the asset purchase agreement with Voyager. While our hope throughout this process was to help Voyager’s customers access their crypto in kind, the hostile and uncertain regulatory climate in the United States has introduced an unpredictable operating environment impacting the entire American business community.“
https://t.co/AZwoBOgsqS has made the difficult decision to exercise its right to terminate the asset purchase agreement with Voyager.
While our hope throughout this process was to help Voyager's customers access their crypto in kind, the hostile and uncertain regulatory climate…
— Binance.US 🇺🇸 (@BinanceUS) April 25, 2023