Three-year-old PlayShifu, with offices in California and India, said it will use the funding to expand its technology, product line and double its retail presence. PlayShifu is active in 15 countries worldwide, including the U.S., Canada, Poland, Germany, Japan and India. It has raised $8.5 million to date. 

“We are experiencing incredible demand from international markets across the world, purely due to the reason that our innovative products make early learning agnostic to markets and languages,” chief operating officer Dinesh Advani said in a statement.

The startup’s flagship product is the Shifu Orboot, a globe that allows kids to explore world landmarks and other cultures through an augmented reality app. The Orboot has surpassed 250,000 users globally, and PlayShifu says that 65% of teachers that own an Orboot use it in their classroom every week.

• The global augmented and virtual reality market is expected to surpass $16.8 billion in 2019 and skyrocket to $160 billion by 2023, according to Statista.
• STEAM curriculum is popular in educational AR and VR because it uses  more tangible concepts that require visualization. 
• “A lot of science concepts are ambiguous and vague. But with VR, when you can physically be in the concepts, it’s a lot easier to grasp,” Zach Grossman, director of education at the VR arcade centertec told Karma.
• Use of AR technology in education is growing, but wider expansion may be limited by the cost. Grossman told Karma: “It’s a lot of money, and if you don’t have enough equipment for the classroom, it creates a divide. It’s hard to keep kids engaged that aren’t in the experience.” 
• Outside the classroom, several toy companies have released AR-based products, including Play-Doh’s Touch Shape to Life Studio, which turns a child’s Play-Doh creations into interactive AR cartoons, and World Map Portal, which produces a wall map of the world that “teleports” users into locations through a VR app.
• Augmented reality companies have also entered the classroom curriculum. Lifeliqe, for example, is the first NGSS and Common Core-aligned augmented reality science curriculum.
• Karma Takeaway:  Toy companies with education-focused products may be the best positioned in the edutech sector to benefit from the technology’s popularity among consumers.

The post AR-Based Educational Toy Maker PlayShifu to Boost Growth with $7 Million Raise appeared first on Karma Impact.

The seed funding, led by IA Ventures and Founder Collective, will be used to further develop the one-year-old startup’s platform and capabilities. Table Management, Sinai Ventures, Cheddar founder and CEO Jon Steinberg and Jonah Goodhart, co-founder of adtech startup Moat, also participated.

Ethyca offers a variety of automated privacy infrastructure tools, including real-time data mapping, customer consent tracking and the ability for consumers to see, edit or delete their own data. Companies can also define which employees can access certain types of data. 

The General Data Protection Regulation (GDPR) was implemented last year to protect the personal information of citizens in the European Union. The regulation affects all entities operating in the EU, even if they are not physically located in the region. Depending on the severity of an infringement, companies can face penalties of up to 4% of worldwide revenue or €20 million ($22.5 million), depending on which is a higher total.

• Current GDPR compliance processes, such as audits of possessed data or appointment of an employee who is solely responsible for ensuring cross-organization compliance, tend to be manual and costly.
• At the end of 2018, over half (56%) of companies reported that they were “far from compliance or will never comply” with GDPR, according to a report from the International Association of Privacy Professionals.
• On top of the FTC’s $5 billion fine against Facebook, the commission also ordered Facebook to take new transparency and accountability precautions and create new tools that enable the FTC to better monitor the social network’s data activities. 
• Competitors including Segment and InCountry are mainly data management startups that have expanded into GDPR compliance. Content platforms like email marketer MailChimp, have also introduced features to help customers comply.
• Karma Take: As regulators are stepping up penalties against social media giants, private companies are creating new tools addressing users’ privacy concerns.

The post Cheddar CEO, Founder Collective Invest in GDPR Compliance Startup Ethyca appeared first on Karma Impact.

As it cultivates its next generation of consumers, many of whom shun sugary beverages like Coca-Cola’s flagship drink, the company has invested $20 million in kombucha producer Health-Ade. The deal for the health drink occurred in May, according to Acuris’ M&A research platform Mergermarket, which cited unidentified sources.

Health-Ade, based in Torrance, California, is the third-largest U.S. kombucha producer, behind PepsiCo’s KeVita and GT’s Living Foods, Mergermarket said. The soda giant had invested in Health-Ade in 2014 through First Beverage Ventures, a limited partner of Coca-Cola’s Venturing & Emerging Brands division.

Coke sees a bright future in the probiotic drink. Last September it bought Australian kombucha distributor Organic & Raw Trading Co., which makes MOJO kombucha drinks. 

Coca-Cola has been pivoting and cultivating younger drinkers for decades as tastes change, beginning with Diet Coke in 1982 to the launch of Dasani water in 1999. Recently purchases include sparkling water company Topo Chico, cold-pressed juice producer Suja and this year’s $4.9 billion deal for coffee chain Costa Coffee.

• Carbonated soft drink sales have been on the decline for over a decade, and health and wellness drinks, such as kombucha, coconut water and bottled water, are picking up. 
• Wellness beverages now make up 41.4% of the overall U.S. beverage market after growing at a 3.6% annual rate since 2012, according to a report from the Beverage Marketing Corporation.
• In December 2018, Coca-Cola’s biggest competitor, PepsiCo, acquired SodaStream International, which enables consumers to make seltzer water at home. It also purchased protein beverage company Muscle Milk in February of this year. PepsiCo also launched its own sparkling water line, Bubly, in February 2018.
• Alcoholic beverage giants are also diversifying through non-alcoholic alternatives. Beer conglomerate Molson Coors, for example, acquired Clearly Kombucha in June 2018, and it holds a minority stake in the chai tea company Bhakti Inc.
• Karma Take: As consumers shun sugary sodas in favor of sparkling waters and healthier wellness-oriented alternatives, beverage producers will need to diversify to remain attractive to investors. Even if it includes scoby (symbiotic culture of bacteria and yeast).

The post Coca-Cola Invests in Health-Ade Kombucha as Pivot Away From Sugar Continues appeared first on Karma Impact.

Gannett and GateHouse Media are in advanced talks to merge, according to the Wall Street Journal, which cited confidential sources. The deal would combine under one roof 265 dailies, including Gannett’s USA Today, the largest U.S. paper by circulation, and have a combined circulation of 8.7 million. The nearest rival would be McClatchy, with 1.7 million.

Financial woes of traditional print have caused a wave of consolidations as companies seek economies of scale in hopes of staying afloat. 

Local newspapers — many of which are alive after being bought by a large consolidator like Gannett — are bleeding users as newspaper readers age and younger consumers turn to social media and mobile phones. Newspaper closures, cost-cutting and circulation dips typically affect smaller local outlets more than their larger urban counterparts.

According to the Wall Street Journal, GateHouse “has a reputation for aggressively slashing expenses” at its papers. Most of GateHouse’s 156 publications are in smaller markets such as Pine Bluff, Arkansas; Bloomington, Indiana; or Cheboygan, Michigan. 

• Since its peak in the mid-1980s, U.S. newspaper circulation has sharply declined. In 1985, weekday paper circulation was about 63 million. Today’s total is estimated to be about 28.5 million, according to Pew Research Center. 
• A 2018 University of North Carolina report titled “The Expanding News Desert” found that almost 1,800 U.S. newspapers have disappeared since 2004. Additionally, fewer than a dozen cities in the U.S. have two competing daily papers, which limits diversity of thought and coverage of local and state government.
• Struggles of local publications has spurred tech giants, credited with squashing local digital advertising efforts and breeding fake news, to launch local news initiatives. 
• On Thursday, Google announced Youngstown, Ohio as the inaugural city for The Compass Experiment, its joint local news initiative with McClatchy, and Facebook’s Journalism Project awarded its first class of $25,000 grants to local newsrooms.
• Karma Takeaway: Without a pivot to a sustainable business model, fallout caused by the newspaper industry’s consolidation will continue to disproportionately affect local journalism.

The post Local Papers Beware: Newspaper Giant Gannett in Merger Talks with GateHouse appeared first on Karma Impact.

The latest example is DeepNude. Code-sharing website Github recently removed the code, which used artificial intelligence to transform innocuous photos of women into porn, from its platform, according to Vice’s Motherboard.

The app, which used a type of machine learning called GAN to replace clothing with nude body parts, was available for four days before its own creators shut it down in late June. The anonymous developers tweeted: “The world is not ready for DeepNude.”

However, other developers reverse-engineered DeepNude’s source code and made it available as open source on Github, eventually prompting last week’s ban of copies of the DeepNude code for violation of the sexually obscene section of Github’s community guidelines. 

This won’t eliminate of the code online, as it easily spreads from developer to developer. Github’s ban may greatly limit its reach.

DeepNude is an example of damage from so-called deepfakes, which use AI to manipulate images and create realistic fakes. Celebrities, politicians and business people have been victims — Mark Zuckerberg and Kim Kardashian have been targeted. Everyday people have also  become victims of deepfake porn or “fakeporn”, a phenomenon exacerbated by DeepNude.

• Deepfake technology recently gained media attention once again with FaceApp, a photo manipulation app that uses AI to age a person in a selfie. FaceApp has come under criticism for its alarmingly lax user agreement and Russian creator. 
• “The circulation of deepfakes has potentially explosive implications for individuals and society. Under assault will be reputations, political discourse, elections, journalism, national security, and truth as the foundation of democracy,” Danielle Keats Citron, a University of Maryland law professor, told a House committee meeting in June.
• On July 1, the state of Virginia amended a law to classify revenge porn and falsely created videographic or still images as Class 1 misdemeanors. Other states, including New York, California, Massachusetts and Texas, have introduced bills addressing deepfakes.
• Karma Take: Use of artificial intelligence to create deepfake videos and falsified pornography may hamper AI advancement as governments and regulators face pressure to restrict the technology in the interest of Internet safety.

The post DeepNude Code Ban Spotlights the Dark Side of AI and Deepfakes appeared first on Karma Impact.

Apple is planning to fund exclusive, original shows for Apple Podcasts, which is already the biggest provider of the downloadable programming, according to Bloomberg News. Up to this point, podcasts on Apple’s service have been agnostic with respect to creator.

The move would mark Apple’s first big financial commitment to podcast content, and could stifle No. 2 rival Spotify and smaller startups trying to find their foothold in the quickly developing market.

Apple “has yet to outline a clear strategy” but it “plans to pursue the kind of deals it didn’t make before,” meaning direct investments into content, unidentified sources told Bloomberg. 

Apple has given no indication of which content producers may be involved, Nicholas Quah said in the most recent issue of his podcast industry newsletter Hot Pod. The impact of any deals would depend on the weight of Apple’s partners.

“A deal with, say, an indie production studio like Pineapple Street and Neon Hum has very different ramifications compared to a deal with NPR, Radiotopia, iHeartMedia, Rooster Teeth or Wondery,” Quah wrote. 

What is unclear is whether Apple would pursue exclusive streaming rights to established shows or bankroll completely new projects. 

Regardless, Apple’s core business is hardware — specifically, the iPhone where most podcasts are played. Its recent ventures into content like television, games and news are seen as efforts to diversify as iPhone sales stall.

Effects on the Industry

Apple, which essentially launched the podcast business with Apple Podcasts, has lately paid it more attention as ad revenue takes off. Annual podcast ad revenue in the U.S. soared 53% to $479 million last year. 

“There was no podcast industry until they created the app. It was very scattered,” Chris Bannon, chief content officer of Stitcher, told Karma. “I don’t think they will willingly let go of that ‘podfather’ role.”

After not tinkering much with the podcast business since its 2005 founding, Apple has in the last year rolled out enhanced analytics for creators and made the programs available through a web player. 

Those moves may have been signaling that the company recognizes the power it wields. The alleged original programming move may help it distance itself further from rivals. 

Apple Podcasts accounts for 52% of the listener market, according to data from the Spotify-owned distribution startup Anchor. That’s more than any of the other platforms combined, and it’s without a single original show.

Spotify has 19% of the market, grabbing market share through an aggressive push over the last year or so. The Swedish company started 2019 with a podcast acquisition spree, buying up Anchor, Gimlet Media and Parcast in less than two months. It has since added a Podcasts tab within its app and web player to enhance discoverability. 

Unlike Apple though, content is a key part of Spotify’s podcast plan. The platform has funded shows from comedian Amy Schumer, journalist Jemele Hill and popular NPR podcaster Guy Raz, and even inked a podcast content deal with former President Barack Obama and Michelle Obama’s production company, Higher Ground.

While Spotify may have enough of the market to stay competitive, a move by Apple into original content likely would have the biggest effect on smaller independent startups such as Luminary or Podimo, who have been trying to crack the code on paid podcast subscriptions.

The smaller companies won’t be able to compete against Apple Podcasts’ domination, its status as the world’s most valuable brand, according to Forbes, and 2 billion iOS devices reach. They may be forced to pivot away from subscription models to a more generalized podcast network that lists their shows on open distribution avenues — including Apple Podcasts.

Still, Apple’s move may provide the indies with opportunities to grow, by casting a brighter light on the industry and bringing in more listeners.

“I assume their decision to make exclusive content is going to drive more consumers to the medium, which I think will be good for all of us,” Bannon said. “They have the power to get people to pay attention.”

The post Apple Aims to Keep “Podfather” Status with Reported Plan for Exclusive Shows appeared first on Karma Impact.

PBS Kids aired the first episode of “Molly of Denali” on Monday morning. The educational animated show, which is targeted at kids ages 4 to 8, follows an Athabascan 10-year-old girl named Molly Mabray whose parents run a trading post in her rural Alaskan town. 

To ensure the show’s cultural accuracy, creators Dorothea Gillim and Kathy Waugh (who are not of Native descent), along with producer Boston public broadcaster WGBH, hired more than 60 people of Alaskan Native, First Nations or Indigenous heritage to advise, write the show and voice the characters. 

Native people portrayed in mainstream media were historically stereotypes of the Wild West and a recent study said a persistent negativity persists in current programs. 

That survey from the First Nations Development Institute found that 78% of people believe “it is important to feature more stories about indigenous people on TV, in movies, and in other entertainment.” 

• A 2019 study from the Center for Scholars & Storytellers found that in children’s television programming, 65% of human characters in the U.S. and 74% in Canada are Caucasian. That same study found that only 38% of main characters are female.
• Introducing children to characters that are different from themselves has been shown to prepare them for school and help develop compassion for others.
• Linda Simensky, vice president of children’s programming at PBS, noted to the New York Times that “Molly of Denali” was only capable of reaching its representation goals because of proper funding from both the federal Corporation for Public Broadcasting and the U.S. Department of Education — a luxury many shows, especially independent projects, don’t enjoy. 
• The number of scripted television shows in the U.S. nearly tripled to 495 last year from from 210 in 2009, according to Statista. 
• Karma Take: Because of streaming, the amount of outlets available has significantly increased the number of shows that can be produced. This creates opportunities to invest in production companies and independent creators developing and producing storylines with diverse characters.

The post PBS Kids’ First Indigenous-Led Show Highlights Challenges in Bringing Diverse Storylines appeared first on Karma Impact.

The company is the latest player in the fast-growing mobile esports space, vying to make e-sports more accessible.

“What we see is a lack of services or a range of games providing an experience for the lapsed hardcore player or that casual player looking for a more core experience,” Kam Punia, founder and CEO of Pixion Games, told Karma. “We are uniquely positioned as professionals and ex-hardcore players to bring esports to everyone.”

Private equity firm Eldridge Industries led the round with participation from Jabre Capital Family Office and three unnamed angel investors. The company specializes in inclusive, easy-to-master multiplayer games that can be played in short sessions, which it refers to as “lunchtime e-sports.”

E-sports ad revenue is expected to exceed $200 million by 2020, according to eMarketer. present a lucrative path for advertisers to reach an audience, as they are accustomed to advertising through mobile games and applications. Pixion Games previously received an undisclosed amount of pre-seed and follow up funding from former executives of King, the maker of the popular mobile game “Candy Crush.”

• Pew Research Center estimates that more than 5 billion people around the world own mobile devices, over half of which are smartphones.
• Esports typically present cost and accessibility barriers to casual players, as most games are played on PC computers or gaming consoles, which can cost upwards of $1,000 and must be connected to larger immobile monitors.
• Mobile gaming still makes up 45% of the overall gaming market with revenues expected to top $68.5 billion in 2019, according to esports research firm Newzoo.
• Karma Take: Growth of mobile esports titles presents an opportunity for both amateur players and advertisers to tap into the booming esports market.

The post Pixion Wants Bring “Lunchtime Esports” to Everyone appeared first on Karma Impact.

Niche apps, especially those catering to LGBTQ+ communities, are among those benefiting from the demand for preference-specific apps. LGBTQ+ sites have consolidated rapidly over the last two years.

“Dating apps built with specific communities in mind have a unique angle, because they can highlight the flaws of mainstream apps and offer a solution that’s tailor-made to their demographic,”  Scott Harvey, editor of the online dating trade publication Global Dating Insights, told Karma. 

Dating apps are popular with the LGBTQ+ community, because members find in-person dating more freighted with safety, compatibility and secrecy issues than is the case with heterosexuals. A study from University of New Mexico and Stanford University researchers found that 65% of same-sex couples met on a dating app.

Last week, Perry Street Software, parent company of the popular gay dating app Scruff, acquired GBTQ+ dating app Jack’d. The deal makes Perry Street Software “the largest fully LGBTQ owned-and-operated software company” in terms of both revenue and market size, with a reach of more than 20 million members.

Grindr, the largest LGBTQ app, was acquired by Chinese gaming company Kunlun Group Limited in January 2018. However, Kunlun has since agreed to sell the app by June 2020 after the U.S. Committee on Foreign Investment raised security risks based upon Grindr containing personal information of users, including location and HIV status. 

Another popular gay dating app, Growlr, recently sold for $12 million to The Meet Group, which owns MeetMe and Tagged. Members of the LGBTQ community criticized the acquisition  because Growlr previously was LGBTQ+ owned and operated.

LGBTQ+ apps are attracting private equity investment. In February 2018, Chinese gay dating app Blued raised $100 million in a Series D round led by alternative asset manager CDH Investments, while Reddit founder Alexis Ohanian and former Y Combinator partner Garry Tan are investors in Her, an app targeted at lesbian and bisexual women.

Investment activity is not exclusive to LGBTQ+ options, though. Niche dating apps that target a specific community outside of sexual orientation, such as age bracket, religion or ethnicity, are also piquing investors’ interest.

“Singles often have multiple platforms on their phones, and this gives niche operators a great chance to stand out side-by-side as the quality, targeted option,” Harvey said.

In April 2018, East Meet East, which connects English-speaking Asian people, secured $4 million in Series A funding, and the U.K.-based Lumen, which focuses on users ages 50 and older, launched with a $4.4 million fundraise in September 2018. 

Even apps aimed at seemingly trivial interests are receiving funding, though smaller in total. Harvey notes that these companies are succeeding “despite having fewer resources than Tinder or Bumble because they understand their audience.” 

According to Pitchbook, Hater, an app that connects users based on topics they mutually hate, has raised $200,000 to date; dog lover-targeted Dig has leashed $750,000; and MeetMindful, an app for wellness and mindfulness enthusiasts, has secured $2.8 million.

As consumers become fatigued with mainstream apps like Tinder, Bumble and Hinge, niche alternatives targeted at underserved communities will likely continue to emerge as attractive opportunities for investors. 

“The giants aren’t going anywhere,” Harvey said, “but there is a lot of opportunity for brands that don’t try to go head-to-head with them as mass market offerings.”

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Lagos-based ROK, founded by actress and producer Mary Njoku, started as an original content incubator for IROKOtv, a video-on-demand service. The company, creator of more than 500 movies and 25 television series since 2013, plans to continue Njoku’s method of low-budget, on-location film production, which it says creates local jobs. 

Canal+ plans to expand production throughout other African regions. The French-language Canal+ presents a potentially powerful partner for ROK, as almost half of the continent’s residents speak French and the number is rising. 

• Canal+ is looking for new customers as streaming services including Netflix and Amazon siphon off users. 
• Netflix is also eyeing Nollywood; it recently slated its first Nollywood film, Lionheart, as well as its first African animated series, Mama K’s Team 4. 
• Nollywood is the second-largest film industry in the world in terms of production output behind India’s Bollywood. It is also the No. 2 employer in Nigeria behind the agricultural sector, according to the International Monetary Fund.
• Nollywood typically produces about  50 films per week with an average budget between $25,000 and $70,000. By comparison, the average cost of a top Hollywood film in the U.S. is $250 million.
• Karma Take: As streaming wars go global and push once-leading TV providers to seek opportunities overseas, Nigeria may rise as a leading production hub for high volumes of affordable content.

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