Bluesky keeps growing: The company announced that as of Friday morning, it had added 3 million new users, bringing its total user count to more than 9 million.
In other words, the social platform’s user base has grown by around 50 percent in the week or so since a Brazilian court banned X (formerly Twitter). The ban sent Bluesky to the top of the free iPhone app charts in Brazil, where it’s currently ranked number two, behind Meta’s competing app Threads.
In addition to sharing the latest user numbers, Bluesky also assured users old and new that video support is “coming soon.”
The platform started as a Twitter-backed initiative to create an open social protocol, but has since become an independent, venture-backed startup and fully opened to the public in February.
In an earlier post about growth, Bluesky said that 85% of its new users are Brazilian. Bringing on so many new users so quickly has led to occasional technical issues.
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Warp is under the spotlight following controversial posts from an account tied to the company.
On Thursday, an account posting under the name Vittorio wrote on X, “i like White people more, they do more, they are better for the roles i need to climb the kardashev scale i’ll let blacks run and play basketball.”
His profile included a badge indicating he was affiliated with Warp, a startup that offers payroll software with a focus on automating state-by-state tax compliance and was part of the winter 2023 cohort at incubator Y Combinator. The badge is something that X (formerly Twitter) created as part of the X for Business program in 2022 — something that’s usually given to employees, but which Warp appears to have distributed more broadly as part of an unconventional marketing strategy.
So the ensuing outcry focused not just on Vittorio, but on Warp as well. The startup disavowed his post as “wrong,” adding, “We believe excellence can come from anywhere.” The company claimed Vittorio was “never a Warp employee” and said it had removed his affiliate badge.
Vittorio’s post and account have since been deleted. Warp’s Head of Growth Varunram Ganesh wrote, “I don’t like what he said, we removed his badge. Everyone piles on him / us online, which is also fine. Nobody should feel bad for him But some of you guys found his address, called people he knows, trying to SWAT him, and are trying to end his whole life Congrats?”
Warp also said it was “cutting down on affiliate badges more broadly, keeping it to a smaller group of people that we personally know.” The company did not immediately respond to a TechCrunch email asking for more details about its relationship with Vittorio and other affiliates.
Meanwhile, some of these affiliate accounts have been defending Vittorio’s post. The account Pico Paco said “vittorio did nothing wrong” and that this was just a “pr crisis.” (Pico Paco appeared to lose its affiliate badge yesterday.) Another affiliate account asked, “is he wrong tho”.
Earlier this week, before the current controversy, The Pragmatic Engineer writer Gergely Orosz complained that his entire X feed had become full of blue checkmarked accounts affiliated with Warp and “posting what feels like ‘engagement bait’” — not just self-consciously edgy political opinions but also copycat posts seemingly designed to go viral.
Orosz speculated that Warp was pursuing a new kind of marketing strategy: “Give this affiliate badge (that most companies would use for eg employees) to ‘hip’ accounts who then draw attention to Warp and also promote it.”
In a now-deleted post, Warp CEO Ayush Sharma wrote that “freedom of speech is essential,” and that Warp is “comfortable with taking risks while also being open to feedback.”
Asked if that means Warp is comfortable with racism, Sharma replied, “no, talking mainly about all the folks who are like ‘why do you give out warp badge to ppl’ – we are okay with trying/experimenting with all this, and as I said, always open to feedback.”
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As a young immigrant in Brooklyn, Mo Shaikh often pondered over his father’s taxi earnings. His father would say he made $100, but Shaikh couldn’t understand why only $60 made it home. (The rest, he learned, went to intermediaries.) This early experience sparked his curiosity about financial systems, but also their shortcomings and the need for change.
Shaikh went on to study finance, economics and psychology at Hunter College, then got an MBA at University of Rochester. After he graduated, he started to cut his teeth in the professional world at places like BlackRock and Boston Consulting Group. But it was his move first to blockchain startup Consensys, and then Meta to work on its cryptocurrency efforts, that he realized that this was the solution to the inefficiencies he’d been witnessing since he was a child.
“I knew this was the place that I wanted to be,” he said.
Together with Avery Ching, he co-founded Aptos in 2021.
It’s been a wild ride for Shaikh and Aptos. Within three months of leaving Meta in December 2021 and founding the startup, it raised $200 million at a valuation of over $1 billion, led by Andreessen Horowitz. Just three months after that, it raised another $150 million. But the wild ride had some bumps: Its investors included the ill-fated FTX.
In the interim the company has continued to grow while also weathering many of the same problems other crypto companies have faced. In April, it launched Aptos Ascend, a full stack of financial features.
And now Aptos and Shaikh have their eye on expanding in Asia.
Aptos is already working with local partners. It announced on Friday a partnership with Libre, an investment infrastructure startup focused on tokenizing financial assets. Libre is a joint venture launched by Japanese bank Nomura’s digital asset unit Laser Digital and hedge fund Brevan Howard’s fintech and web3 incubation hub WebN Group.
Libre launched a web3 protocol to access hedge funds and private credit funds on the Aptos Network. The partnership will enable eligible Aptos users to access a host of on-chain funds, including the Brevan Howard Master Fund, Hamilton Lane Senior Credit Opportunities, and BlackRock ICS Money Market Fund.
TechCrunch sat down with Shaikh this week at the Korea Blockchain Week 2024 conference in Seoul to talk about Aptos’ expansion in Asia, particularly in countries like South Korea, Japan, Singapore and the Middle East; its partnerships with major Asian web2 companies; and how Aptos uses blockchain to make financial transactions seamless and cost-effective.
“Asia probably has one of the biggest needs for web3. There are so many different disparate payment systems. There are so many financial institutions that have a lot of legacy infrastructure,” Shaikh said. “I used to live in Dubai when I was working at BCG, so I’m kind of familiar with all of that [East Asia, Southeast Asia and Middle East countries.] But when building Libra [at Meta], one of the main use cases was how people make money move easily, seamlessly and globally. … You want to be as transparent as possible. Financial institutions want that, regulators want that, and users want that.”
“Instead of paying 15%, you pay 0% [via a blockchain payment system], so that means I get all the money that you sent me, instead of, you know, it being lost to all these fees … [In Asia,] They’re really excited to move forward.”
These factors contribute to the economic growth in Asia, leading to increased efficiency and profitability for companies and users, Shaikh said. Companies can cut their costs to reallocate funds, and people can save money by sending it worldwide without fees. Korean telco company SKT from SK Group, for example, sees the importance of building a crypto wallet for users to have better and more efficient forms of money, Shaikh told TechCrunch.
Aptos has established strategic partnerships with tech giants like Microsoft and Google, as well as media conglomerates like NBC Universal in the West. In Asia, Aptos has partnered with leading companies such as SKT, a major telco company from SK Group, Korean retail giant Lotte, and the web3 subsidiary of Japanese bank Nomura.
“I think all of these things coming together in Asia has been phenomenal. But there’s one secret sauce, I would say, Asians are continental-wise, very excited to adopt new technology. They’re very mobile-friendly; they’re always entrepreneurial. They’re forward-thinking, and that’s amazing. When it comes to web3, they’re willing to try things in a very experimental way, but they know there’s an opportunity there. And so all of those problems that we’re solving, combined with the appetite of the user, make it a perfect place for Aptos.”
Most recently, Aptos invested in a bunch of companies based in Hong Kong.
Shaikh also touts the performance of blockchain technology in terms of costs and speed. “A lot of people talk about muddy movement. Many folks claim they can do these cool things, but I don’t think anyone shows the power of blockchains,” he said.
“So there’s a gaming company. A gaming company launched a game on our blockchain. They produce every transaction in that game on our blockchain on Aptos. That transaction, you would imagine, like, if you’re transacting on a blockchain, it’s going to cost you money on Solana. There’s a cost associated with Ethereum. Our blockchain is built incredibly efficiently. So the cost of that transaction is a 1,000th of a penny, so it’s pretty much free, and that makes this game run really well,” the CEO said. “If you’re a web2 game developer, you can launch on our blockchain and take advantage of that cheap transaction. But it also allows you to speed and throughput. If you’re setting a transaction on a game, let’s say each click of that game is happening on the chain. If there’s a two-second delay, even a one-second delay, your game is going to be slower. We had a sub-second finale so that transactions were happening in under one second, so the game was not interrupted, and the transactions that took place in a 24-hour window were 500 million transactions.”
He mentioned that 500 million transactions in 24 hours is the next best version of a blockchain Solana. And Solana is a previous-generation blockchain at this point; the most that it’s been able to do is 50 million transactions, Shaikh said. “We did 10 times that, which is crazy. And what happens with protocols like Solana is those networks go down,” he said.
The CFTC named Shaikh to its digital assets subcommittee in June. When asked if Aptos is working with local governments in Asia, Shaikh said the company loves talking with local governments in Asia and educating them about what they’re doing.
“We’re actually doing stuff with not just talking to governments, but doing stuff with governments,” Shaikh said. “Governments want to feel safe; they want a blockchain that is going to protect their citizens. And we’re very lucky to be able to have those conversations with [local governments in Asia] and then also help them move up the model. Governments are getting smarter. They’re excited about this technology. It’s not just Bitcoin, but real technology underneath that powers the future economy. We love to work with the regulators and governments and make the solutions really come to light.”
He said Japan has done a phenomenal job in letting the industry know this is what you can do. “Japan is also paying attention to the work that we’re doing here in Korea. And I think Korean regulators are very excited about what can happen in real-world asset tokenization. RWAs are something that we’re very, very optimistic about. In the Middle East, for example, in Abu Dhabi, you have the Abu Dhabi global markets and Dubai as well. Different parts of Asia are moving very fast, and that’s good because now this technology can grow in these areas, and in these countries, cities like Seoul are getting to stay ahead of the curve. And so that’s awesome for Korea, and it’s also for Japan, Abu Dhabi, and even other places like Singapore.”
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In 2022, Carta’s business license was revoked in Illinois for failing to pay franchise tax, a tax on national corporations doing business in the state, according to state records seen by TechCrunch. In 2024, Washington state terminated cap table software Pulley’s business license, according to state filings.
Carta spokesperson Amanda Taggart told TechCrunch that the company just missed the proper timeline to file its yearly report and pay the corresponding tax. Taggart added that the company has remedied the situation and is waiting on Illinois to return it to good standing. Yin Wu, the founder and CEO of Pulley, said that the company has filed the outstanding returns and is in the process of getting its license reinstated.
Startups like Carta and Pulley are definitely not alone in running afoul of state business rules. Plus, while these companies both had registered in these states as required and ran into issues later, many startups don’t begin the registration process in each state when they should at all.
When startups have employees in a state, conduct an acquisition or sign up customers there, they typically need to register in the state and maintain themselves in good standing. That includes paying their state taxes and fees on an ongoing basis, Andrea Schulz, a lawyer at Grant Thorton, told TechCrunch. If they don’t, they risk being fined by the state, or other consequences.
The problem, experts say, is that each state has its own complex fees, tax, and business registration requirements. And state-level compliance isn’t something top-of-mind for startup founders, nor is it a priority for an early-stage founder’s precious budget dollars, Schulz said.
“In some cases every dollar is going to the customer-facing solution,” Schulz said. “That is really why it ultimately happens. It’s not that it is too onerous, or a lack of expertise in that area.”
Schulz says that, when founders do misstep on state rules and fees, the fines or other issues may not come to light until a startup is being acquired, thinking of going public, or going through an audit.
Ginger Mutoza, a paralegal and corporate legal operations manager at contact center software company 8×8, told TechCrunch that she’s seen that first hand. She said her company is currently working to clean up the compliance of a company it acquired, issues which came to light after the due diligence process.
“They took the easy way out. They didn’t report any other mergers or stock option issuance to employees. We have to go back past the statue of limitations for tax claims,” Mutoza said. “We have to recreate history with a company. It becomes very expensive fixing those errors. They can just compound year over year over year.”
The main reason state-level compliance is so hard for startups is that the states don’t make it easy. Each state wants different information in different formats to keep companies in good standing.
Robert Holdheim, the COO of back office and compliance platform Traact, told TechCrunch the company has yet to have a customer come to its platform that had all of its state compliance properly accounted for — even if they thought they did.
“I have the same attitude that everyone else does: it is a pain in the ass,” Holdheim said. “This is one of the areas that has always been left up to the states. They all do something completely different. There is no ability to easily access information. There’s very little digital information. You have to call in and wait for hours and hours.”
Illinois, that state that booted Carta, is particularly known for being difficult. For example, Illinois still only takes paper filings and payments by check.
The rules vary on when a startup needs to register, too. In terms of customers, some states require registration when a company is doing a vaguely worded “substantial amount” of business in a state, Mutoza said.
Most states do require registration when employees are located there, says Bruno Drummond, founder and partner at CPA and consulting firm Drummond Advisors. If a company tells their employees they can work from wherever, they are setting themselves up to have to file a foreign business entity every time someone moves to a new state. Many don’t keep up.
The good news for most startups is that the consequences of getting state rules wrong are typically relatively mild. Companies pay the back taxes and the fines and get back into good standing.
However, the consequences could be more severe. If a startup’s state fines and issues are too onerous, this could be a catalyst for an acquirer to walk away, if it doesn’t want to pay to clean up the mess, Schulz said.
Not being a legal business entity in a state may also impact a startup’s legal protections in that state.
“If you are not in good standing in a certain state as an entity, officially every legal protection that entity has is suspended,” Holdheim said, pointing to Texas specifically. “If somebody sues you in Texas and your Texas entity is not in good standing, you automatically lose. You can’t appear in court if you don’t have legal protections in that state.”
He’s referring to Section 9.051 of the Texas Business Organizations Code, which prevents unregistered businesses from defending themselves against lawsuits in state courts. The same may go for initiating lawsuits in a state if the startup isn’t in good standing – like suing another business for using the startup’s proprietary intellectual property.
Drummond said that startups may also be dropping the ball in other areas like sales tax. He added that companies that have more than $50 million in investment or revenue need to file a monthly report with the U.S. Bureau of Economic Analysis, but most don’t. Hiring folks outside of the U.S. further complicates compliance too.
The upshot is that state-level regulations need to be factored into a founder’s business plans as soon as feasible, be it through investing in compliance software or through hiring legal experts. Traact isn’t the only company that can help startups stay up-to-date on state compliance. Mosey is another venture-backed startup. DFIN and Vanta are larger companies that offer compliance services.
“These entrepreneurs, founders, they kick the ball and then they run after the ball, they don’t plan, they don’t say I’m going to kick it that direction,” Drummond said. “Everytime they kick the ball there is some kind of compliance to fulfill to not get penalties.”
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Antonio Nuño, Fatima Alvarez, and Enrique Rodriguez have been friends since they were five years old. As teenagers, they became volunteers helping indigenous communities — first in Mexico, then in other countries — and saw that many of the women were artisans.
The trio came to realize that these artists “made very beautiful things in a very sustainable way,” Nuño recalls, and by the time they were 25, the idea for a business had germinated. They imagined connecting these artists, “their techniques and their stories with the supply chains of global companies looking for more sustainable ways to create products.”
So in 2016, Someone Somewhere was born. Today the Mexico City-based startup works with hundreds of rural artisans in seven of Mexico’s poorest states to apply traditional handcrafts on clothing and accessories, with the mission of creating “quality, on-trend products.”
The startup helps artisan groups organize as cooperatives or small businesses, formalize, access a bank account, and build communitary savings accounts. The artisans are paid for each product they make. Someone Somewhere supplies the materials, and pays 50% in advance and 50% once they finish each product.
In its first few years, Someone Somewhere landed contracts with some larger companies such as Ben & Frank (the Warby Parker of Latin America) and Rappi. But in 2023, the trio realized they could use AI — particularly Stable Diffusion’s text to images model — to help the company scale even further.
They fed their databases of all the various materials and techniques the artisans used into Stable Diffusion’s model and began designing AI-assisted concepts, produced as images, of well-known products. The idea was to “show companies how some of their most iconic items could look if they were made with artisans from different regions.”
They posted the concepts on sites like LinkedIn and Instagram, tagging the companies. For example, they created images for Red Bull and Trader Joe’s.
But it was when they posted their concept of an adidas-branded Mexican National Team soccer jersey on LinkedIn in March that changed their business forever. That post went viral, ultimately receiving more than 1 million views, with people tagging adidas employees for visibility.
In the post, Nuño estimated that each shirt would “generate six months of fair work for more than 3,000 artisans” and “allow more than 15,000 people, including families, to break the cycle of poverty.”
He wrote: “We can imagine what would happen if Mexico’s next jersey was made in collaboration with Someone Somewhere, and incorporated elements hand-embroidered by various communities in the country. It would be the first time that a national team launches such an initiative, and it would undoubtedly inspire dozens of other countries to replicate it since crafts are the second largest source of employment in all of Latin America, Africa and Asia.”
Just one day after the post went up, Nuño says that adidas reached out and asked for a meeting. Within weeks, his company had an agreement to launch a physical product made available to adiClub members, as well as to Mexican soccer players and content creators.
All told, the marketing post reached more than 50 million people, and was covered on national TV and over 100 media outlets, according to Nuño. On June 21, the companies announced the new collection of Mexican National Team jerseys, hand-embroidered by women artisans from the Sierra Norte of Puebla, Mexico.
Each shirt represented more than 11 hours of hand-embroidery work, symbolically representing the 11 players who proudly represented Mexico in the Copa América.
“Through these jerseys, both adidas and Someone Somewhere seek to honor the work of Mexican artisans and continue embracing the cultural heritage of the country, both its roots and the seeds it leaves for future creative generations,” said Pablo Cavallaro, senior director, Brand Activation at adidas, in a statement. “This collection is inspired by the communities where the artisans create each of their pieces, the space they call ‘home’.”
The shirts available to the public include Someone Somewhere’s signature detail: a QR code so that the user/purchaser can learn more about the artisan who helped create it.
“Now we are working on more things with adidas that we will launch next year,” Nuño said.
Nuño credits advances in AI for his startup’s recent growth.
“We found that creating products with AI shows companies the potential so it’s easier to move forward,” Nuño told TechCrunch. “It has allowed us to develop partnerships with a lot of companies, based in the U.S. mostly,”
The strategy is working so well that Someone Somewhere went from designing 10 products a month to 5,000.
“This has helped us accelerate, and it’s an amazing way of showing that AI can take away jobs but also create them, if used creatively,” he added. “Just in the last 12 months alone, we’ve made more than 10 million products with this model.”
Meanwhile, Someone Somewhere’s revenue has grown 36x in the last three years. This year, the 75-person team is working with triple the number of brands than it did last year, in large part thanks to the use of AI to co-create products.
The Stable Diffusion model that Someone Somewhere is using came out last year and allows users to fine-tune the concept images it creates.
“You can control the silhouettes of products,” Nuño said, adding that this allows his startup to experiment with fabrics and embroideries when developing a concept product.
“Before our main bottleneck was showing companies the potential of what we could do together. We had to make physical products, which takes a lot of time. This technology opens doors — they say an image is more than a thousand words. Now we’re able to connect with these big brands and that makes the conversation go way faster,” he said.
That’s led Someone Somewhere to deals like a co-branded sustainable accessories line with Gator Cases, and with companies such as Google, Uber, Stripe and Amazon (among others) to make merchandise for their employees, events and marketing campaigns.
AI is not the only thing responsible for Someone Somewhere’s growth.
The company also accidentally landed a deal, through its use of those QR codes, that placed some of its products in Apple stores worldwide and online. The products are made through a partnership with a company called Nimble, which makes sustainable electronic accessories. Someone Somewhere sells its products to Nimble, which in turn sells it to Apple.
Nimble CEO and co-founder Ross Howe is a Delta One business class customer, and on a flight last year the airline gave him an amenity kit made by Someone Somewhere.
“The items were neatly packed in this fabric bag, which immediately caught my attention,” he recounts. “It was very high-quality, and had a QR code to meet the artisan who made it. By the time the plane landed, I learned everything I could about the company behind it, and wanted to explore an opportunity to work with them.”
Nimble already had some concepts for new products that included a carrying case but “just needed the right partner to help create it,” Howe said. “Aside from their apparent design capabilities, Someone Somewhere’s mission and status as a fellow Certified B Corp checked so many boxes for what we look for in a partner.”
So the company reached out to learn more.
Today, its new Apple-exclusive collection features a series of PowerKnit Travel Kits with USB-C charging cables. Each includes a travel case made in collaboration with Someone Somewhere. The pouches are being sold in Apple stores in 30 countries, including the U.S. and most of Europe.
“After years of researching potential companies to collaborate on this type of project, we hadn’t come across anything quite like what Someone Somewhere is doing,” Howe said. “We are exploring additional projects for potential future release.”
All of this growth has come after raising a total of just $1.7 million in funding from investors such as Dila Capital, GBM Ventures, Kalei Ventures, Louis Jordan, Soldiers Field Angels, and Unreasonable Capital, so far.
Someone Somewhere has been profitable since 2022, and is in the process of raising a new round “to take advantage of the nearshoring and sustainable procurement trends that are clearly growing,” Nuño said.
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BDO, the auditor for Indian edtech startup Byju’s, has resigned with immediate effect, marking the second auditor departure for the embattling startup in about a year and further intensifying concerns about its financial health and governance.
In a scathing resignation letter, BDO subsidiary MSKA highlighted multiple issues with Byju’s, including significant delays in financial reporting, inadequate management support, and concerns over the company’s ability to recover substantial dues from a Dubai-based entity.
The auditor’s exit comes as Byju’s, once India’s most valuable startup at $22 billion, grapples with a series of crises, including a recent Supreme Court decision to resume insolvency proceedings against the startup.
Deloitte, Byju’s previous auditor, and the startup’s key board members resigned last year, citing governance issues at the firm.
MSKA, appointed in August 2023 for a five-year term, said in its resignation letter: “There has been inadequate support from the management of the Company in providing us the books of account, information and explanations sought by us and sufficient appropriate audit evidence to enable us to complete the audit for the Financial Year 2022-23.”
In a statement, a Byju’s spokesperson said BDO’s requests to the firm required “crossing ethical and legal boundaries.”
“The real reason for BDO’s resignation is BYJU’S firm refusal to backdate its reports, while BDO went to the extent of recommending a firm that could facilitate such an illegal activity. Multiple call recordings exist, where BDO representatives explicitly suggest backdating these documents, which BYJU’S refused to do. BYJU’S strongly believes that this is the main reason for their resignation,” Byju’s spokesperson added.
MSKA disclosed that it has filed Form ADT 4, suggesting potential fraud or illegal activities within the company.
The resignation letter also highlighted concerns about various ongoing litigations against Byju’s and its board, including initiation of liquidation proceedings by lenders, and allegations of oppression and mismanagement by minority shareholders.
MSKA noted instances where Byju’s failed to share critical information, such as notices for EGM and insolvency proceedings, with the auditing team.
The auditor’s departure adds to the mounting challenges facing Byju’s, which has seen its valuation plummet amid missed financial deadlines, revenue shortfalls, and conflicts with investors. Top backers, including Prosus and Peak XV, have previously alleged governance issues and sought legal action to remove founder Byju Raveendran.
The edtech firm’s troubles have escalated in recent months, with the Indian Supreme Court recently putting on hold a tribunal ruling that had halted insolvency proceedings against the company. U.S. creditors are seeking to recover $1 billion from Byju’s, adding to the pressure on the once-celebrated startup.
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