Meta says about 10% of its global ad revenue at risk from EU data flows order

Meta’s earning call yesterday was upbeat on better than expected revenue for the quarter. However buried in its disclosures to investors is a stark warning on looming regulatory risk it’s facing in Europe — where a decision is expected in a matter of weeks (by May 12) that could see the tech giant ordered to suspend its transatlantic data flows.

“We expect the Irish Data Protection Commission (IDPC) to issue a decision in May in its previously disclosed inquiry relating to transatlantic data transfers of Facebook EU/EEA user data, including a suspension order for such transfers and a fine,” Meta’s CFO wrote in its Q1 2023 report.

We’ve covered the (very) long-running saga — which hinges on a clash between US surveillance laws and EU privacy rights — most recently here and here. So regular TechCrunch readers will already know that a key development Meta is hoping will save its bacon in Europe is the adoption of a new high level data transfer pact which aims to resolve the legal uncertainty around EU data exports.

However the negotiations over this replacement deal have dragged on longer than expected and EU institutions are still reviewing the draft decision the Commission announced in December. So while the bloc had initially suggested the deal might be finalized by the end of 2022, it was forced to revise the estimate — saying in December that it hoped everything would be nailed down before July.

Since then, multiple EU institutions involved in reviewing the deal have been raising concerns — so there’s still no firm word on when exactly the thing might be done. (Or, indeed, whether a new deal will survive the inevitable legal challenges, given the two prior pacts got invalidated by the Court of Justice of the EU.)

In its earnings report, Meta tells investors it’s hopeful the new EU-US data framework will arrive soon enough to be implemented before the deadline for a suspension of its EU transfers — meaning, were these stars to align, it could reboot its claim to have an authorized mechanism for its EU transfers and flick the suspension order away — however the company also warns it “cannot exclude the possibility” that adoption won’t happen soon enough to prevent such an order.

“Our ongoing consultations with policymakers on both sides of the Atlantic continue to indicate that the proposed new EU-U.S. Data Privacy Framework will be fully implemented before the deadline for suspension of such transfers, but we cannot exclude the possibility that it will not be completed in time,” Meta writes. “We will also evaluate whether and to what extent the IDPC decision could otherwise impact our data processing operations even after a new data privacy framework is in force.”

During a call with investors, the social networking giant was asked about the potential impact on revenues if it is forced to suspend EU-US data flows on regulatory order. Responding, CFO Susan Li began by reiterating its hope that the new high level framework will save its bacon. However, if this sought for escape hatch fails to open in time, she warned investors Meta is facing a hit of around a tenth of its worldwide ad revenue — saying “roughly 10%” of this comes from ads delivered to Facebook users in EU countries.

Li caveated the disclosure by saying it’s difficult for Meta to forecast the overall impact of any EU data suspension at this point, given it lacks information on what a final order would contain — such as the length of a suspension.

Earlier in the call Meta’s CFO offered a breakdown of ad revenue growth by regions, saying it was strongest in the “Rest of World” segment (at 9%) during the quarter, followed by North America and Asia-Pacific (6% and 4%, respectively) — while she specified that Europe had declined 1%.

Meta beats revenue expectations, remains committed to metaverse

MEPs raise concerns over draft EU-US data transfer deal

Meta says about 10% of its global ad revenue at risk from EU data flows order by Natasha Lomas originally published on TechCrunch

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Nokia XR30 rugged Android phone detailed press images leak

Nearly two years after Nokia announced its XR20 rugged smartphone, we get details of its successor – the Nokia XR30 aka Nokia Sentry 5G. WinFuture shared a multitude of official-looking images for the phone in its black and green color options. The XR30’s design appears to be slightly modified from its predecessor with a similar-looking punch-hole display and what appears to be a hard plastic shell. We can only assume the phone will retain the IP68 water and dust protection alongside MIL-STD-810H certification from its predecessor. Nokia XR30 in black The power...

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M3ter locks in $14M to expand its usage-based pricing tools for SaaS businesses

The concept of SaaS as a business model changed the game in tech by moving users away from buying software outright and towards paying for service availability based on time-based subscriptions, typically with per-month or annual pricing. Today, a startup out of London called M3ter that is building tools to take the next step in that evolution — more granular usage-based pricing — is announcing funding on the back of strong demand.

The company has raised $14 million — a Series A that it will be using to double down on new markets like the U.S., and to build more technology for its users. Notion Capital is leading this round, with Insight Partners, Union Square Ventures, and Kindred Capital — all previous backers from its $17.5 million seed round last year — also in the round. The company is not disclosing its valuation but CEO and co-founder Griffin Parry tells me it now estimates it has some 3-4 years of runway.

M3ter came out of stealth a little over a year ago — a debut that coincided with the announcing of that seed round — and in that time it has grown its business 375%.

Its customers these days are typically technology businesses built around API calls, a natural fit for usage-based pricing models, and they include payments business Paddle, ID verification company Onfido and fraud prevention startup Sift.

And indeed, the very concept of starting a business to help other tech companies adopt and adapt to usage-based pricing comes from the founders’ own experiences: Parry and co-founder John Griffin previously founded GameSparks, a games development engine build on usage-based pricing. That startup was eventually acquired by Amazon’s AWS — arguably the grand-daddy of popularizing usage-based pricing for APIs by way of its cloud services platform.

One of the unique aspects of usage-based pricing is the granularity it gives customers: they are paying just for what they are using. At its core, that is something that has proven to be more popular especially in current, leaner times, when businesses are more cautious than ever around how they spend money, possibly at the expense of being less focused on simply budgeting based on predictable outgoings.

And while it is certainly not ubiquitous among all SaaS businesses, it has definitely grown in popularity.

Research from OpenView found that 45% of SaaS vendors in 2022 were adopting usage-based pricing compared to 33% the year before that. The prediction for 2023 had been 55% but as Parry pointed out to me, that figure has been revised up to 61%, alongside another 10-15% growth if you add in those businesses that have said that they are considering it.

(Unsurprisingly, M3ter is not the only company looking to capitalize on that. SF-based Metronome, backed by some heavy hitters out of the Bay Area; and more legacy companies like LogiSense are among those also building out usage-based pricing platforms.)

“Software companies are looking at pricing as a strategic lever these days,” Parry said. “As a customer, you don’t want to leave money on the table, and you also want to focus on growing more efficiently.” Efficiently in this sense means, essentially, by spending as little money as possible to get there.

In the past, he continued, it was about predictability and knowing every month that you were paying a certain amount for a service, “but things have swung in other direction.”

Parry admits that there remains a significant cultural shift among SaaS businesses, especially those that might have already built their businesses around time-based models — growing pains that are probably not that much different than those that software companies faced when they moved from selling off-the-shelf software to products sold on subscriptions.

But on the other hand, introducing usage-based billing also means opening the door to getting more granular data on what customers are using, and how they are using it, which in turn can inform not just what you are offering them, but what the SaaS provider is building and investing in as business.

To that end, M3ter is going to be using some of the funding to continue building out more sophisticated tools of its own. They include a data science product it’s calling Cost Allocator.

Based on feedback M3ter has been getting from its users, it will let customers figure out gross margin performance on a per-user basis, which Parry explained to me will help them figure out how to adjust pricing accordingly. (The idea here is that you can create rewards or lower prices for those using more of a service, or charge more per use for those who are not power-users.)

Pricing Experimenter and Usage Forecaster are also products under development. Respectively, the former of these will let M3ter customers test pricing models in real-time with simulations based on data troves it has amassed; and the latter will apply similar modeling to determine what a company might make under different business evolution scenarios. All of this can also be used to help businesses price tiers but also work out more nuanced approaches with different users, including continuing to offer some of them more traditional SaaS packages if that turns out to be a better option.

The startup’s approach to product development, by working with its customers to build what they want, fits closely with the fact that at the end of the day, M3ter itself is also a usage-based business and working to be responsive to what its customers are doing.

Some of the products that its customers are building using its platform include database startup ClickHouse offering usage-based pricing for its cloud offering; and subscription management platform Chargebee offering event metering, usage-based pricing, and billing capabilities.

As I mentioned above, its customers these days are typically technology businesses built around API calls, but there is a clear opportunity for working this into all kinds of other products, from entertainment consumption through to anything a person might engage with online or in an app.

“As pricing becomes a strategic priority for more software businesses, the one-size-fits-all approach looks increasingly obsolete,” said Jos White of Notion Capital, in a statement. “m3ter’s technology will power this transition towards more usage-based and intelligent pricing. Already, the company’s co-founders have laid solid foundations with an exceptional team and product, as well as deep engagement and alignment with their early customers and partners.”

M3ter locks in $14M to expand its usage-based pricing tools for SaaS businesses by Ingrid Lunden originally published on TechCrunch

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Realme 11 Pro+ official image confirms design

The Realme 11 series is arriving on May 10, and we already knew at least one phone will have a circular camera island and stylish leather-like design on the back. Today, the company treated us to a full view of the phone, confirming the Realme 11 Pro+ indeed features leather and fabric on the back, with the color bearing the official name Sunrise Beige. According to a Realme VP, the design was developed jointly with Matteo Menotto, currently Head of Design for Textile at Bvlgari, formerly Senior Designer at Gucci. The design is said to be inspired by the sunrise in a romantic city...

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Poco F5 and F5 Pro announcement set for May 9, design teased

The Poco F5, which was rumored to launch on April 6, will launch on May 9. This revelation comes from Poco, which also confirmed the Poco F5 Pro will be unveiled on the same date. Poco is yet to detail the F5 and F5 Pro's specs sheets, but Qualcomm's Indian branch confirmed the Poco F5 would be powered by the Snapdragon 7+ Gen 2 SoC, making it the first smartphone in India to have this chip at the helm. Oncoming 🟡 🚀#IgniteYourHyperpower #POCOF5Pro #POCOF5 pic.twitter.com/jyLVI30QBp— POCO (@POCOGlobal) April 26, 2023 Today, Poco's Indian division gave us a glimpse of the Poco F5's...

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Alphabet Q1 report reveals increase in Google Pixel sales

Alphabet, the parent company of Google, posted its first quarterly report for 2023, revealing a slight increase in total revenue. The “Google other” segment that includes the Google Pixel 7, 7 Pro, 6A, and Watch sales, saw an 8.8% increase in revenue on a yearly basis. Google CEO said the company is “pleased” with performance in Q1 - Search performed well, while the Cloud business gained momentum, bringing operating profit for the first time since the establishment of the division. YouTube is taking a hit from TikTok, but ad revenue on the video platform reached $6.69 billion, which...

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Lookout sells its consumer cybersecurity business to F-Secure and goes all-in on the enterprise

Lookout’s long-running transition to becoming an enterprise security company is all but complete, revealing today that it’s selling its consumer mobile security business to Finland’s F-Secure. Terms of the deal were not disclosed.

Founded out of Boston in 2009, Lookout originally started out as a consumer-focused smartphone security and data backup business, garnering millions of users and hundreds of millions in funding from esteemed investors including Andreessen Horowitz, Accel, Greylock, Morgan Stanley, Deutsche Telekom, and Jeff Bezos.

Over the past 10 years, Lookout has gradually extended its reach into the business realm, notching up enterprise partnerships with technology giants such as Samsung along the way. A couple of years back, Lookout went most of the way toward cementing its B2B credentials when it snapped up cloud-native cybersecurity startup CipherCloud, a company focused on the growing secure access service edge (SASE) security segment.

Fast-forward to today, and while Lookout still offers a suite of security products for the consumer market including antivirus software for smartphones, it’s clear that its trajectory in recent years has been heading much closer to the enterprise, which is why it’s offloading pretty much all of the remnants of its consumer business to F-Secure — a long-established European consumer cybersecurity company that sells everything from password management tools to antivirus applications.

Lookout says that with this transaction, which it expects to conclude within the next two months, its business will “now evolve into a pure-play enterprise company,” focusing on mobile endpoint security and cloud security. While it didn’t disclose how much it gained for its consumer business, it said that the proceeds will be be plowed back into its enterprise products, alongside the $150 million in debt-financing it secured from BlackRock last summer.

“Our success in the highly competitive enterprise market has compelled us to focus our product and go-to-market efforts to gain advantage,” Lookout CEO Jim Dolce noted in a press release. “By doubling down on the enterprise market, we’ll be better positioned to capitalize on its projected hypergrowth, fueled by an increase in remote and hybrid work, a shift to cloud-based delivery models and the transition to zero-trust architectures.”

Lookout sells its consumer cybersecurity business to F-Secure and goes all-in on the enterprise by Paul Sawers originally published on TechCrunch

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