The top 10 startups from Y Combinator’s Demo Day S’18 Day 2

59 startups took the stage at Y Combinator’s Demo Day 2  and among the highlights were a company that helps developers manage in-app subscriptions; a service that lets you create animojis from real photos; and a surplus medical equipment reselling platform. Oh… and there was also a company that’s developed an entirely new kind of life form using e coli bacteria. So yeah, that’s happening.

Based on some investor buzz and what caught TechCrunch’s eye, these are our picks from the second day of Y Combinator’s presentations.

You can find the full list of companies that presented on Day 1 here, and our top picks from Day 1 here. 

64-x

With a founding team including some of the leading luminaries in the field of biologically inspired engineering (including George Church, Pamela Silver, and Jeffrey Way from Harvard’s Wyss Institute) 64-x is engineering organisms to function in otherwise inaccessible environments. Chief executive Alexis Rovner, herself a post-doctoral fellow at the Wyss Institute, and chief operating officer Ryan Gallagher, a former BCG Consultant, are looking to commercialize research from the Institute around accelerating and expanding the ability to produce functionalized proteins and sequence-defined polymers with diverse chemistries. Basically they’ve engineered a new life form that they want to use for novel kinds of bio-manufacturing.

Why we liked it: These geniuses invented a new life form.

CB Therapeutics

Sher Butt, a former lab directory at Steep Hill, saw that cannabinoids were as close to a miracle cure for pain, epilepsy and other chronic conditions as medicine was going to get. But plant-based cannabinoids were costly and produced inconsistent results. Alongside Jacob Vogan, Butt realized that biosynthesizing cannabinoids would reduce production costs by a factor of ten and boost production 24 times current yields. With a deep experience commercializing drugs for Novartis and as the founder of the cannabis testing company, SB Labs, Butt and his technical co-founder are uniquely positioned to bring this new therapy to market.

Why we liked it: Using manufacturing processes to make industrial quantities of what looks like nature’s best painkiller at scale is not a bad idea.

RevenueCat

RevenueCat helps developers manage their in-app subscriptions. It offers an API that developers can use to support in-app subscriptions on iOS and Android, which means they don’t have to worry about all the nuances, bugs and updates on each platform.

The API also allows developers to bring all the data about their subscription business together in one place. It might be on to something, though it isn’t clear how big that something is quite yet. The nine-month-old company says it’s currently seeing $350,000 in transaction volume every month; it’s making some undisclosed percentage of money off that amount.

Read more about RevenueCat here.

Why we liked it: Write code. Release app. Use RevenueCat. Get paid. That sounds like a good formula for a pretty compelling business.

 

Ajaib

Indonesia is a country in a transition, with a growing class of individuals with assets to invest yet who, financially, don’t meet the bar set by many wealth managers. Enter Ajaib, a newly minted startup with the very bold ambition of becoming the “Ant Financial of wealth management for Indonesia.” Why the comparison? Because China was in the same boat not long ago — a  country whose middle class had little access to wealth management advice. With the founding of Ant Financial nearly four years ago, that changed. In fact, Ant now boasts more than 400 million users.

China is home to nearly 1.4 billion, compared with Indonesia, whose population of 261 million is tiny in comparison. Still, if its plans work out to charge 1.4 percent for every dollar managed, with an estimated $370 billion in savings in the country to chase after, it could be facing a meaningful opportunity in its backyard if it gains some momentum.

Why we liked it: If Ajaib’s wealth management plans (to charge 1.4 percent for every dollar it manages) work out — and with a total market of $370 billion in savings in Indonesia — the company could be facing a meaningful opportunity in its backyard.

 

Grin

The scooter craze is hitting Latin America and Grin is greasing the wheels. The Mexico City-based company was launched by co-founder Sergio Romo after he and his partner realized they weren’t going to be able to get a cut of the big “birds” on the scooter block in the U.S. (as Axios reported). Romo and his co-founder have already lined up a slew of investors for what may be the hottest new deal in Latin America. Backers include Sinai Ventures, Liquid2 Ventures, 500 Startups, Monashees and Base10 Partners.

Why we liked it: Scooters are so 2018. But there’s a lot of money to be made in mobility, and as the challenge from Bird and Lime to Uber and Lyft in hyperlocal transit has revealed, there’s no dominant player that’s taken over the market… yet.

Emojer

Creating animated emojis made from real photos, Emojer just might be the most fun you can have with a camera. The company’s software uses deep learning algorithms to detect body parts and guides users in creating their own avatars with just a simple photo take from a mobile phone. It’s replacing deep Photoshop expertise and animation skills with a super simple interface. The avatars look very similar to Elf Yourself, a popular site that let you paste your friends’ faces on dancing Christmas elves that went viral every year at Christmastime. Founders have PhDs in machine learning and computer vision.

Why we liked it: As the company’s chief executive said, Snap was for sexting, and Facebook was hot or not, so who says the next big consumer platform couldn’t be the trojan horse of easily generated selfiemojis (akin to Elf Yourself)?

Osh’s Affordable Pharmaceuticals

Osh’s Affordable Pharmaceuticals is a public benefit corporation connecting doctors and patients with sources of low-cost, compounded pharmaceuticals. The company is looking to decrease barriers to entry for drugs for rare diseases. Three weeks ago the company introduced a drug to treat Wilson’s Disease. There was no access to the drug that treats the disease before in Brazil India or Canada. It slashes the cost of drugs from $30,000 a month to $120 per month. The company estimates it has a total addressable market of $17 billion. “Generic drug pricing is a crisis, people are dying because they can’t get access to the medicine they need,” says chief executive Alex Oshmyansky. Osh’s might have a solution.

Why we liked it: Selling lower-cost medications for rare diseases in countries that previously hadn’t had access to them is a good business that’s good for the world.

Medinas Health

Tackling a $75 billion problem of healthcare waste Medinas Health is giving hospitals an easy way to resell their used and a and supplies. The company has already raised $1 million for its marketplace to help healthcare organizations buy and sell equipment. With a seed round led by Ashton Kutcher and Guy Oseary’s Sound Ventures, and General Catalyst’s Rough Draft Ventures fund, the company is also working to lower costs for cash-strapped rural health care centers.

Why we liked it: tktk

And Comfort

Plus-size women have limited clothing options even at the largest retailers like Nordstrom and Macy’s. While a majority of American women fall into the plus-size clothing category, 100 million women are constrained to shopping for a very small percentage of options. And Comfort wants to solve the supply problem. To do this, the founders, two former Harvard classmates, are building a direct-to-consumer fashion brand with stylish, minimalist offerings for plus-size women, including tunic shirts and an apron dress. It’s very early days for the brand, but since launching in recent weeks, they’ve seen $25,000 in sales.

Why we liked it: This direct-to-consumer fashion brand is bringing higher quality, better-designed clothing options to a market that’s underserved and growing quickly. What’s not to like?

 

ShopWith

Influencers of the world are uniting on mobile app, ShopWith, which allows shoppers to browse virtual storefronts and aisles alongside their favorite fashion and beauty creators and YouTubers. Users can see exactly what products those influencers have featured and can buy them without ever leaving the app. It’s a free download and hours of commercially consumptive fun.

It’s like the QVC model, but for GenZ shoppers whose buying habits are influenced by social video content on YouTube, Instagram and Snapchat. The company revealed that one beauty influencer made $10,000 within five hours, using the ShopWith platform. The founders are former product managers with experience building social commerce products at Facebook and Amazon.

Why we liked it: The QVC for GenZ not only has a nice ring to it, it’s a recipe for making cash registers hum. A mobile-first, influencer-based shopping company is something that we’d definitely not call an impulse purchase.

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Amazon-backed lending platform Capital Float buys consumer finance startup Walnut

India-based lending platform Capital Float has been busy raising capital, having closed an Amazon-led $22 million extension to its $45 million Series C last year —  now it’s putting some of that capital work after it acquired personal finance service Walnut.

The acquisition is $30 million spread across cash and stock, the companies said, and it’ll boost five-year-old Capital Float’s move into the consumer space. The company has to date focused on serving SME and business customers, but last year it began to offer financial services to consumers.

Walnut helps consumers manage their finances and track spending, and it claims seven million downloads on Android. It also includes a feature — Walnut Prime — that offers an instant credit line. Already, it said, it has handed out nearly $15 million in consumer loans.

“Walnut Prime is a product of deep interest to us, and it will essentially become a new addition
to our stable of exceptional, customized credit products,” Capital Float co-founders Sashank Rishyasringa and Gaurav Hinduja said in a statement.

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Apple could release an updated MacBook Air

According to a report from Bloomberg, Apple has been working on multiple new Macs. In particular, Apple could be planning to release a new entry-level laptop to replace the aging MacBook Air.

This isn’t the first rumors about a MacBook Air refresh. While Apple has released a 12-inch retina MacBook, it’s not nearly as cheap as the MacBook Air. It’s also not as versatile as it only has a single USB Type-C port.

And yet, the MacBook Air is arguably Apple’s most popular laptop design in recent years. Many MacBook Air users are still using their trusty device as there isn’t a clear replacement in the lineup right now. According to Bloomberg, the updated MacBook Air could get a retina display. Other details are still unclear.

After Apple updated the MacBook Air in March 2015, the company neglected the laptop for a while. It received an update in June 2017, but it was such a minor update that it looked like the MacBook Air was on life support.

It sounds like neither the entry-level 13-inch MacBook Pro (the one without a Touch Bar) nor the 12-inch MacBook have fostered as much customer interest as the MacBook Air.

Bloomberg also says that the Mac Mini is going to receive an update. The story of the Mac Mini is quite similar as the product has been neglected for years. Apple last updated the Mac Mini in October 2014 — it’s been nearly four years.

And the fact that Apple still sells the Mac Mini from 2014 is embarrassing. You can find tiny desktop PCs that are cheaper, smaller and more powerful. They don’t run macOS, but that’s the only downside.

It’s clear that laptops have taken over the computer market. Desktop computers have become a niche market. That’s why the updated Mac Mini could focus on people looking for a home server and who don’t want to mess around with a Raspberry Pi.

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China reaches 800 million internet users

China’s internet population has now grown beyond 800 million, according to the latest data from the Chinese government.

A new report [in Chinese] issued by the China Internet Network Information Center (CNNIC) put the number of people in China with access to the internet at 802 million. The agency — which is a branch of the Ministry of Industry and Information and is responsible for controlling the .cn country code — estimates that 29.68 million people in China came online for the first time in the second half of 2018.

For some context, the U.S is estimated to have around 300 million internet users. The number of internet users in China is now more than the combined populations of Japan, Russia, Mexico and the U.S., as Bloomberg noted.

The new statistic takes internet adoption in the country to 57.7 percent, with 788 million people reportedly mobile internet users. That’s a staggering 98 percent and it underlines just how crucial mobile is in the country.

Other notable data points from the report include:

• 21 percent of China’s internet users are also online banking users
• 71 percent used online payments or e-commerce services
• 74.1 percent used short video applications, which include ByteDance’s Douyin app (known as TikTok outside of China)
• 30.6 percent used bike sharing apps
• 43.2 percent used taxi-booking apps
• 37.3 percent used the internet to reserve buses and trains

The growth of China’s internet also puts pressure on the government to maintain its policy of control over information that appears online.

It is common knowledge that Western services such as Twitter and Facebook are inaccessible in Mainland China, but the government has also cracked down on local services that include Toutiao, which is run by new media firm ByteDance, which is currently talking to investors to raise $2.5-$3.5 billion. ByteDance was ordered to shutter a parody app it operated in China while four news and content apps were suspended from the App Store and Google Play for offending authorities. ByteDance responded by doubling its content moderation team and developing stronger systems for checking content.

Apple has also been caught in the crosshairs. The company reported purged thousands of apps from the App Store in China recently. Last year it removed more than 50 VPN apps, which can be used to circumvent China’s internet censorship system, because they are deemed to be illegal in China.

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Google Fit gets a redesign, adds Heart Points and coaching

Google Fit is getting a major update today. The company’s activity tracking app has been around for a few years now but until today, it pretty much worked and looked that same as on the day it launched. Today’s redesign is quite a departure from that old look and feel, though, and it also introduces quite a few new features that help take the service in a new direction.

The most obvious new feature in the new version is that instead of only focusing on active minutes (or ‘Move Minutes’ as they are called now), Google has now introduces the concept of Heart Points. With this, you don’t just score points for moving but the app will also give you extra points for activities that actually get your heart beating a bit faster. Google Fit will give you one point for every minute of moderate activity and double points for more intense activities (think running or kickboxing). You won’t be able to buy anything with those points, but you’re more likely to live longer, so there’s that.

Like before, Google Fit will automatically track your activities thanks to the sensors in your phone or Wear OS watch. You can always manually add activities, too, or use apps like Strava, Runkeeper, Endomondo and MyFitnessPal to get credit for the workouts you track with them.

What’s also new in this update is actionable coaching, something that was sorely missing from the old version. It remains to be seen how useful this new feature is in day-to-day use, but the idea here is to give you feedback on how active you’ve been throughout the week and help you stay motivated.

What I’m actually the most excited about, though, is the new look and feel. Based on the screenshots Google has shared so far, the app now provides you with far more details at a glance, without having to dig into timelines (which weren’t all that usable in the old version to begin with).

The new version is now rolling out to Android and Wear OS users.

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Costco now supports Apple Pay across all of its US stores

Apple has landed a big new partner for Apple Pay in the U.S. after Costco began accepting the mobile payment service across 750 stores. The retailer plans to include support at its gas stations, but that isn’t yet complete.

The rollout — first reported by MacRumors — follows limited trials at selected Costco outlets, including a warehouse near its corporate headquarters in Washington.

This new partnership comes hot on the heels of Apple’s landing similar deals with CVS and 7-Eleven. The deal with CVS is particularly notable since the retailer had held off on supporting the Apple service, to the point that it even developed its own alternative that is based on barcodes. Apple also secured a deal this summer to add Apple Pay support to eBay which gives it more breath among online retailers, too.

The service is operational in 30 international markets and, in the U.S., it is tipped to account for half of all contactless payments operated by an OEM by 2020, according to a recent analyst report.

The market for such services — which includes Samsung Pay, Google Pay and others — is tipped to reach 450 million consumers. Apple, though, is already seeing the benefits. Apple Pay is part of the company’s ‘services’ division which recorded revenue of $9.6 billion in the last quarter, that’s up 31 percent year-over-year.

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Apple cracks down on gambling apps in China

Apple is cracking down on illegal content in China after it removed potentially thousands of apps related to gambling.

The Wall Street Journal reported that the U.S. phone-maker purged as many as 25,000 apps — that’s a figure that was first cited by state-owned broadcaster CCTV [link in Chinese]. Apple didn’t comment on the number of apps removed, but it did confirm that it took action.

“Gambling apps are illegal and not allowed on the App Store in China. We have already removed many apps and developers for trying to distribute illegal gambling apps on our App Store, and we are vigilant in our efforts to find these and stop them from being on the App Store,” a spokesperson told TechCrunch.

Apple offers over 1.5 million apps in China. Greater China — which includes China, Hong Kong and Taiwan — is Apple’s third largest region based on business, grossing $9.6 billion in the most recent quarter. That’s around 18 percent of its total revenue.

The removals come weeks after a number of state-media reported criticism of Apple for failing to prevent issues such a spam, gambling, pornography and more concerning its business in Asia.

That criticism has been linked to the ongoing trade war between China and the U.S. — a spat that cost Qualcomm’s its $44 billion acquisition of NXP — but that may be wide of the mark. Apple is not alone in being rebuked by Beijing for content deemed unsuitable, a number of China’s up-and-coming startups have also had their wings clipped.

Earlier this year, ambitious new media firm ByteDance — which operates news and video apps and is currently talking to investors to raise $2.5-$3.5 billion — was ordered to shutter a parody app it operated in China. Additionally, four news and content apps were suspended from the App Store and Google Play for offending authorities. ByteDance responded by doubling its content moderation team and developing stronger systems for checking content.

“Content had appeared that did not accord with core socialist values and was not a good guide for public opinion. Over the past few years, we put more effort and resources toward expanding the business, and did not take enough measures to supervise our platform,” founder and CEO Zhang Yiming said in a statement that seemed designed to appease internet regulators.

Apple has, of course, taken criticism for kowtowing to Beijing by removing more than 50 VPN apps, which can be used to circumvent China’s internet censorship system, from the App Store. CEO Tim Cook has expressed his belief that the apps — and others removed by Apple in order to comply with Chinese law — will return, but it is difficult to envisage a scenario in which that happens.

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