Here’s some encouraging news for the European startup scene, and London in particular. TransferWise, the online currency exchange that uses the crowd to undercut traditional money transfer services, has announced that it’s closed a $6 million series A round led by Peter Thiel’s Valar Ventures — the first investment in Europe by the PayPal co-founder and early Facebook investor’s international fund.

We also understand that Ron Conway’s SV Angel has joined this round, along with a small number of angels, and TransferWise’s existing backers IA Ventures, Index, Seedcamp, and TAG. This brings the total raised by the company to $7.35 million since its launch just two years ago.

Originally billing itself as the “Skype of money transfer“, TransferWise enables individuals and businesses to send money between countries for a fraction of the price that banks and others charge, using a peer-to-peer, “crowdsourced” model — where money destined for transfer doesn’t unnecessarily actually leave each country. It passes on these saving by charging a small flat fee per transfer.

(It’s the P2P element that playfully draws the Skype simile, as well as the fact that TransferWise co-founder Taavet Hinrikus was the Internet calling giant’s first employee, while other members of his team also worked at the company.)

The company also pitches itself as the preferred method of money transfer for European startups, recently garnering some decent PR with an offer to waive the fees for a total of $100 million worth of international money transfers for qualifying startups using the TransferWise platform. Interestingly, Thiel was one of a host of names publicly endorsing the campaign, so we probably should have known something was going down.

Hinrikus tell me that the new funding will enable TransferWise to continue expanding, both in terms of the number of currencies it plans to support, and in raw head-count. It started out offering British Pound and Euro transfers, and has since added support for the U.S. Dollar, Swiss Franc, Polish Zloty, and Danish, Swedish and Norwegian Krone. In total, the company claims to have transferred over £125m worth of customers’ money, saving £5 million-plus in banking fees (though it isn’t without competition). Meanwhile, the team has grown to 33 members of staff.

“There’s another dozen currencies to be launched this year and 20 more people needed in the team,” says Hinrikus. “Also we need to launch locally in key European markets – Germany, France and Spain.” Hinrikus says TransferWise continues to grow between 20-30 percent a month, which to date equals roughly 10x year-on-year growth. “Doing what’s in the pipeline puts us on track to do another 5-10x this year,” he says.

Staying on message, London-based TransferWise (with an office also in Tallinn, Estonia) is now calling itself a Tech City startup. Tech City, headed up by Joanna Shields, ex-Google, AOL/Bebo, and most recently Facebook’s head of EMEA operations, is the UK government’s re-branding of the London tech scene and, specifically, East London’s “Silicon Roundabout” area.

Cue the now prerequisite statement from Shields: “Transferwise is a shining example of the successful businesses that make Tech City a thriving ecosystem. London has a real strength in financial services and technology, with many companies like Transferwise transforming financial services for consumers, for the better.”

That said, TransferWise’s HQ is on Shoreditch High Street, which doesn’t get any more Silicon Roundabout than that. And certainly, a $6 million series A is no mean feat for a European startup, and nor is attracting a top tier Silicon Valley investor like Peter Thiel.

Article courtesy of TechCrunch

Learning a language is never easy. One thing that’s usually missing in the way students learn a new language is the ability to use their new skills while talking to a native speaker. LanguageTwin, a startup I met at the Willamette Angel Conference in Corvallis, Ore., last week, aims to do just that. The service brings together language learners for peer-to-peer interactions to give students the opportunity to apply what they’ve learned in the classroom while having a conversation or acting out real-life scenarios.

It’s worth noting that this is not a freemium service. LanguageTwin only plans to work with colleges and K-12 schools right now and will charge these schools a $10-$25 fee per term (or a slightly discounted price per year). The idea here is that the service will pair students from two different countries and then allow them to talk to each other over video chat. Right now, the team is focusing on students who want to learn Spanish (with French, German, Mandarin and other languages on the roadmap) and has run a number of tests with 5,000 students from over 100 universities in the U.S., Spain, Mexico, Colombia, Panama, Chile, Costa Rica and a number of other countries.

As the name implies, the original idea behind LanguageTwin was to assign a “twin” to every student in the system. Say you are learning Spanish. LanguageTwin would set you up with a student in a Spanish-speaking country who is trying to learn English. The problem with this, as the founders told me, is that it’s not easy to coordinate the schedules of two students living in different parts of the world, and students shouldn’t be penalized if their twin decides to forget about a meeting or turns out to be flaky. The system the team now uses is more flexible than the original scheme and allows users to find new ‘twins’ every time they use the system.

The twist here is that teachers can use the system to assign students to use LanguageTwin for a set number of minutes every day or week. All of the chats are recorded and teachers can play them back at their leisure. Some teachers who have used the system, the company’s co-founder Michael Lucia told me, also pick one random LanguageTwin session from their students in place of an oral exam.

The video chat, which is at the core of the service’s platform, also features text chat capabilities, a translation tool and, most importantly, a folder with assignments and a few ice-breaker questions to get less-structured conversations going. Professors can, of course, upload their own content to the service.

As Lucia told me, it’s this framework around the chats (plus the ability to record them) that makes LanguageTwin very different from just using Skype to start a conversation.

Article courtesy of TechCrunch

Larry Yu, the public relations executive who has headed up Facebook’s corporate communications operation for five years and helped steer the company through the publicity blitz surrounding its IPO, is leaving the social networking company. He announced his departure this morning in a post on Facebook, writing:

“Nearly five years ago, I joined some friends at a privately-held company called Facebook to help a small team scale and expand upon the company’s story. That journey was, in a word, crazy. And fun. Terrifying. And gratifying. So I’m off to do it again. I’m joining my friends Brandee, Brian and Sean to help build The Pramana Collective, a project-focused communications consultancy that works with cool companies.”

Yu is not the only tech PR big wig on the roster at the Pramana Collective, which first emerged earlier this spring. The Brandee he refers to above is of course Brandee Barker, who headed up Facebook PR from 2006 to 2010; Brian is Brian O’Shaughnessy, who previously led communications at Skype after four years at Google; and Sean is Sean Garrett, who previously headed up PR at Twitter.

Sean Garrett wrote in a post on his personal blog that Yu will be joining Pramana as a partner next month, and added a few details on the specialties he’ll be bringing to the firm:

“Brian, Brandee and I have all worked with Larry in the past, and we know that his close-to-20 years of experience is a perfect fit for The Pramana Collective and our clients. Beyond being a thoughtful guy who is universally liked and respected, Larry knows how to navigate companies through chaotic growth stages with confidence and calm. And we all admire how he makes financials, process and operations look easy, maybe even fun (well, almost).”

It’s a loss for Facebook, to be sure, but a big gain for the startup world. We’ll certainly be watching to see how Pramana shapes the conversation as it takes on clients.

Article courtesy of TechCrunch

When it comes to productivity apps, Office is still clearly the market leader, and Microsoft is now also quickly iterating on its online apps for Office. When it comes to its competition with Google’s online productivity apps, though, it’s hard to figure out if Microsoft is feeling superior or threatened (or a bit of both). Earlier today, I talked to Michael Atalla, the director of product marketing for Office 365 at Microsoft. In his view, Google doesn’t really get how businesses use productivity apps.

Businesses, Atalla told me, are looking to find the right mix of tools from companies they trust. He believes Microsoft has the “broadest vision of productivity” that includes everything from the basic Office tools like Word, Excel and PowerPoint, to database servers, Skype and Lync for connectivity and real-time presence indicators, and support for multiple platforms.

Productivity, he said, “is more than just working in the browser” (a clear nod in Google’s direction), because organizations also want security policies, the ability to work with data on-premise and off-premise, and a full set of business-focused capabilities (including business analytics, for example) — some of which can’t yet be replicated in a browser or just aren’t part of the standard online productivity suites yet.

He also noted that while Google provides businesses and consumers with the same set of tools, “one size doesn’t fit all.” And while Microsoft “deeply understands that businesses need capabilities that go beyond consumer needs,” he clearly implied that Google doesn’t. Google’s focus, he somewhat jokingly added, seems to be on Glass and not on the productivity apps on Drive.

Google’s I/O developer conference will kick off next Wednesday, and chances are the company will announce at least a few updates to its productivity suite. Its acquisition of QuickOffice has given Google access to better technologies to provide Office users with the kind of high-document fidelity that only the Office Web Apps currently offer online.

I can’t help but think that Microsoft is trying to preempt some of these announcements with the release of its Office Web Apps roadmap earlier this week and its overall publicity campaign around productivity (and it’s somewhat infamous Scroogled campaign).

Article courtesy of TechCrunch

For America to maintain its fragile role as the most innovative nation on earth, it must perpetually attract the world’s best and brightest. There will always be trailblazing engineers who stay in their home country, leaving the United States one notch below its potential. Yet, on the heels of comprehensive immigration reform, a new viral economic study claiming that there is no tech talent shortage has skewed the national discussion over why we need to aggressively attract high-skilled immigrants in the first place.

An Economic Policy Institute study claims that there is a surplus of American engineers, and, as a result, has garnered national headlines in The Washington Post, The Wall Street Journal and The Atlantic for busting “The Myth of America’s Tech-Talent Shortage”. It has fueled protectionist critics who rail against the high-skilled visa system for a being a low-paying indentured servitude scheme to trap vulnerable foreigners into low-paying, exploitative companies.

While the study highlights important misconceptions about our less-than-pretty immigration system, let’s not forget that many major tech firms, from Google to Tesla, were founded by immigrants. Yet, as more and more household-names are produced abroad, from Skype to Spotify, it’s becoming clear that America is losing its grip as the sole source of pathbreaking innovation. There will always be a shortage to the extent that America has international competition

Below, I explain the Economic Policy Institute’s argument, its methodological shortcomings, and why there will always be a shortage of great workers.

What Critics Claim

The Economic Policy Institute argues that two important figures prove there is no tech talent shortage:

1. There is a surplus of American graduates with Science, Technology, Engineering and Math (STEM) degrees
2. Wages for STEM careers are stagnant; if there was a dearth of applicants, wages would rise to attract more workers

Both of these claims are true. Roughly half of STEM graduates never take a job in the field, and 52% of of those who ditch a technology career do so for reasons related to pay, promotion, and working conditions. “For STEM graduates, the supply exceeds the number hired each year by nearly two to one,” write the authors.

Perhaps more importantly, since the early 2000s, wages for programmers have virtually stalled. Yet, we know when there is demand for programmers in the tech industry, wages rise. Indeed, just prior to the Internet bubble, wages sky rocketed. Moreover, in one at least career with significant excess demand, petroleum engineers, wages rose a staggering 71%. In other words, STEM careers respond normally to the laws of supply and demand; if there truly was a dearth of programmers and engineers, we’d see wages rise.

Indentured Workers

University of California, Davis Professor Norman Matloff, one of the fiercest critics of the high-skilled H1-B visa program, has argued that companies largely seek foreign workers for cheap labor. Under the current system, foreign workers need a sponsoring firm, allowing them to extort dreamy-eyed immigrants for lower salaries, who are threatened with immediate deportation if they lose their job.

Almost half of the 85,000 high-skilled work visas are snatched up by shady consultant firms who are suspected of exploiting guest workers for cheap labor. Just last month, the FBI indicted a Texas IT firm, Dibon Solutions, for hoarding H1-B workers, paid only when contractors needed their service. Dibon “earned a substantial profit margin when a consultant was assigned to a project and incurred few costs when a worker was without billable work,” according to a government report.

For guest workers, abuse, exploitation, and uncertainty is rampant.

Not Apples to Apples

While it is true that the high-skilled visa system is flawed and there is a surplus of engineers, other researchers have found that the market does properly value immigrants, when they’re compared to natives of similar skill, education and age. The Economic Policy Institute averages all technology wages together, yet immigrants who uproot themselves from their homeland tend to be much younger, early career engineers (and, hence, lower paid).

“Age differences appear to play a role and the H1-B advantage is greater once this is adjusted for,” finds a study from the respected Public Policy Institute of California. When comparing foreign to natives by age, occupation, and education level, immigrants earn about 13% more than their US counterparts.

Not surprisingly, many immigrants, especially from Asian nations, have terrible English skills, which leaves them ineligible for higher paying managerial roles. “If all immigrants with an engineering degree had the proficiency of English–only speakers,” writes Rutgers professor Jennifer Hunt, “they would have conditional wages very close to those of natives (1.9% lower)”.

Before journalists reprint studies, we should be cautious of non-peer reviewed analysis from “think tanks” with an obvious agenda.

Sometimes Immigrants Are The Best Choice

In response to the types of studies that showed the relative wages of immigrants and natives, Matloff lashed out at the H1-B system for perpetuating agism in Silicon Valley. “Employers prefer to hire younger, thus cheaper, H-1Bs instead of older, thus more expensive, Americans.” In terms of patents and academic work, he found, immigrants tend to be on par with natives, busting the so-called “best and brightest” myth. In order to protect American workers, he argues, visas should only be granted to select immigrants.

While a large labor dataset of wages may show relatively equal economic value between natives and foreign, it ignores all ways in which immigrants contribute to American innovation. TechCrunch contributor Vivek Wadhwa has found that 24.3 of engineering and technology companies had at least one foreign born founder, employing 560,000 workers who contrbuted $63 billion in sales (just in 2012).

How can so few foreign works make such a big impact? They’re responsible for founding a litany of household name companies, including Sun Microsystems (Vinod Khosla), Google (Sergey Brin), PayPal, SpaceX, and Tesla Motors (Elon Musk). In some ways, the immigration system is a lottery: most immigrants won’t add much more value, but every so often a genius comes along that justifies thousands of average workers.

This is precisely why Congress is now considering the creation of a new “startup visa”, which permits immigrants to found companies without being shackled to an employee sponsor. There doesn’t appear to be limit on the number of immigrants who qualify for the startup visa, because it’s best to assume that America is always at a shortage of brilliant foreigners who could start the next Google or Paypal.

But, of course, it’s not just founders; Berkeley Researcher AnnaLee Saxenian found that one of the secrets to Silicon Valley’s success was immigrant cultural groups, who mentor new arrivals and develop lucrative ties with their family and friends around the world. These highly skilled emigrants are now increasingly transforming the brain drain into “brain circulation” by returning home to establish business relationships or start new companies while maintaining their social and professional ties to the US,” she writes [PDF]. Global benefits like these aren’t captured in wage data because workers won’t always reside in the U.S..

As a corollary, modern employers aren’t just looking for an adequate employee — they’re looking for a worker who’s at least as good, if not better, than everyone else their seeing around the world. “Jobs postings will be listed for months without finding a good candidate,” explains former Zynga software engineer and founder of Appurify, Rahul Jain, to us in an email, “we need the best of the best”.

In many instances, the only qualified worker may be a friend of a friend, who has the dewy-eyed drive of an early employee who spent weekend nights dreaming up the idea of a new company with the founders. “In my case, and some of my friends, you’re really passionate, you want to work for that company,” explains H1-B worker, Myles Sutherland, of Mapping company Esri , “I’ll take anyone from the United States or any country in the world that’s just super passionate about that job.”

It’s no shock then why the high-skilled worker visa cap was maxed out this year in a record 5 days.

This kind of employee motivation isn’t captured in the Economic Policy Institutes wage data, because startups may not be able to pay foreign workers more; rather, they’ll just wait months to the perfect fit, if the position gets filled at all.

Matloff and his fellow critics may be right that the guestworker program needs fixing. It’s exploitative and corrupt. But when the goal is to be the most innovative country on the planet, we’ll have a tech talent “shortage” until every single trailblazing founder, and their hyper-passionate friends, works in the U.S.

American can never get enough brilliant innovators.

Article courtesy of TechCrunch

Facebook is No. 1 most downloaded iPhone app of all time – Celebrating 50 billion total downloads across the App Store this week, Apple released new all-time most downloaded apps with Facebook at No. 1 of the free iPhone downloads list. Instagram is No. 3 and Messenger is No. 16. Compared to Facebook’s three, Google has four apps in the top 25: YouTube, Google, Google Earth and Google Maps.

Among free iPad downloads, Facebook is No. 6, with Skype at No. 1.

Facebook courts media with new portal – Facebook has launched a new section of its developer site to focus on how media and journalists can best use the platform for distribution. It gives an overview of possible website integrations, such as the Like button, Facebook Comments and Open Graph optimization. It also offers best practices for managing Facebook pages, along with related research reports and case studies. Slate, for example, doubled its referral traffic from Facebook between the second quarter of 2012 and the first quarter of 2013 by adding a new share button to its stories, optimizing its Open Graph tags and focusing on its page strategy.

Microsoft to redesign Facebook for Windows Phone – Microsoft announced this week that it would open the Windows Phone Beta app program to give users an opportunity to test the latest redesign of its Facebook app. Unlike Facebook for iOS and Android, which are developed internally by Facebook, the app for Windows Phone is created by Microsoft. The beta app will get Timeline,  the share button and more high resolution photos.

Facebook looks to expand Dublin operation with new office – Facebook has agreed to rent office space with room for at least 800 people in a building in Grand Canal Square in Dublin, according to Independent.ie. The company recently said it would be adding 100 employees to its Dublin headquarters, which is currently around 400 people. The new office would give the company room to grow. The Daniel Libeskind building where the new office will be is in an area sometimes referred to as Dublin’s ”Silicon Square Mile.” Google has an office nearby.      

Article courtesy of Inside Facebook

Microsoft has announced that it is launching a preview of Skype for Outlook.com starting in the UK. The service will be made available in the U.S. and Germany in the coming weeks before it is rolled out to the rest of the world.

With the rollout of Skype for Web, the VoIP service joins Microsoft’s suite of online tools, including SkyDrive. Since its launch six months ago, Outlook.com, meant to replace the Hotmail brand and design, has garnered 60 million users. Microsoft acquired Skype for $8.5 billion back in October 2011.

Skype for Outlook.com requires a one-time download of a plugin, which is available for the most recent versions of Internet Explorer, Chrome and Firefox. Users can connect to Outlook.com using their Microsoft account. People who already have existing Skype accounts can link it to Outlook.com, which will allow them to add their Skype contacts to the email service.

More details on the rollout and step-by-step instructions are available on the Outlook Blog and the Skype Blog.

Article courtesy of TechCrunch

Skype has officially announced the availability of its BlackBerry 10 app, out initially for Q10 devices, which means not many people will have access to it, since the Q10 doesn’t ship until the beginning of May. As you my have seen from my review, I do have access to a Q10 currently, and the Skype app is one of the ones that I’ve been testing alongside the device itself. The good news is, the app provides does indeed provide access to Skype VoIP and chat services. The bad news is, it does so with a bare minimum of elegance resulting in a painful UX.

Users of Skype for Android will find the app familiar, since it’s one of the many apps that’s actually an Android port running on BB10 via a virtualization wrapper. In many cases, that arrangement works fine, delivering a perfectly functional app (see Songza, for instance). But in the case of Skype, the non-native nature of the app, combined with the already sub-par Android version, results in an experience that is probably best left unexperienced by most.

The issues are mostly around lag, unresponsive taps, chats that take forever to update and show you their history, and notifications that seem only loosely tied to actual in-app events, and which also ignore your device audio settings. With both media volume and notification audio turned all the way off, Skype was still making its trademark new message notification noise, even when no new messages seemed to be coming in. When the app is closed, these ghost notifications persist, even for a little while after I’ve actually gone so far as to sign out within the app itself and closed the app in the multi-tasking view on BB10.

As mentioned, it works, allowing you to conduct calls and send and receive messages. But if you’re a heavy Skype user (we use it at work for one-on-one communication with fair frequency), you’re gonna have a bad time. This version is admittedly beta, but it’s a perfect example of why, while it may solve some of BlackBerry’s app issues, Android porting isn’t a great long-term solution.

Article courtesy of TechCrunch

Rebtel, a VoIP provider sometimes thought of as Sweden’s (smaller) answer to Skype, today is releasing a new SDK that will let iOS and Android app developers embed Rebtel-based voice calls by way of an API directly into their apps, free of charge. This represents a new line of business for Index Ventures/Benchmark-backed Rebtel, which has up to now built a business on its own retail, consumer cheap-calls VoIP offering, now at 22 million monthly active users and profitable.

In one regard, Rebtel’s new (and free) API is a case of disrupting the disruptors: it puts it into direct competition with the likes of Twilio, Callfire, TelAPI and others already chipping away at mobile carriers’ business by offering voice services as an embeddable, cloud-based service that takes consumers away from using voice minutes and on to data networks.

The SDK was initially launched as a limited beta in December with 20 developers including TGTHR, Agile Dimension, eXeltior and MobisleApps. Today marks the full rollout, with a self-service platform and bid for more users.

“We expect thousands of developers and project that there will be 10-15 million people using the platform by the end of this year,” Andreas Bernström, Rebtel’s CEO, tells TechCrunch. He bases this on the thousands of developers he says have been contacting Rebtel from around the world, including India, China, Europe and the U.S. to use the SDK. To date, the company’s forecasts have been close to reality: projected revenues of $80 million for 2012 turned out to be $79.6 million he says. Rebtel says it is currently on course to exceed the $100 million in sales they expect for 2013. That could also lead to an IPO in two or three years.

The idea, Bernström says, will be to keep the basic VoIP API free of charge, with that service effectively aimed at those interested in calling others using the same app — for example, one early adopter is the dating app Maybe, which lets users call each other to get acquainted. The idea is to tap into the long tail of app developers and apps — currently at around 750,000 developers working in iOS and Android, and covering some 1.5 million apps, by Rebtel’s estimates.

“In the beginning we have no intention to make money from this,” he says. “The bandwidth cost for us is relatively small so if someone has hundreds of thousands of users it’s not a problem.” In the free, VoIP-only implementations, consumers see a small logo for Rebtel appear before they get connected.

Further down the line, Bernström says that Rebtel will be introducing some paid elements, specifically around group calling and charging for call termination to landlines so that you can call any number, which is how Rebtel makes revenues today.

He adds that bigger users of the SDK, with customers in the multiple millions, will like also pay for added service-level agreements to ensure uptime in the app. As for who might be a larger user, Bernström would not name specific companies but says Rebtel is already talking with some large messaging providers and gaming companies that might want to add voice services to their apps, all with over 50 million users. (Worth pointing out that at this point WhatsApp is among the messaging apps that does not have voice services; Facebook’s messenger does, in certain markets.)

Offering its service as a API-based wholesale offering is Rebtel’s bid for scale that it has yet to achieve as a standalone business since launching in 2006. “That
for us this is a pretty big step since we’ve been a consumer service for such a long time,” Bernström notes. “We want to build up the Rebtel brand as the technology for voice.” For now, the company doesn’t plan to add support for Windows Phone or BlackBerry.

Introducing the VoIP SDK gives Rebtel a chance to do something else: help pick up higher-spending smartphone users. Right now the company’s user base is about 60% feature phone and 40% smartphone — partly due to it being a legacy service, and partly because up to now it has aimed squarely at the low-cost user market that typically uses lower end devices. Building a service that is specifically aiming for scale on smartphones only could help tip the balance in the other direction. Added to Rebtel’s own smartphone apps, the aim for this year is for the proportion to be 60/40 in favor of smartphone users.

Rebtel hasn’t raised any money since picking up $20 million in 2006 from Index and Benchmark, but nor has it needed to, since it’s already profitable and has $12 million in cash reserves to finance new projects like this one.

While Bernström is not fundraising, though, he isn’t adverse to talking. He says that the investment climate in Stockholm today is very healthy. “People from the Valley seem to be taking road trips here on a regular basis, so I’m seeing Sandhill Road right here,” he says. “I think, like anybody, if the right person came along with the right investment offer it would be interesting but we’re generating a lot of cash right now and growing at the speed that we want to.”

Article courtesy of TechCrunch

The BlackBerry Q10 is, some might say, the BlackBerry OS 10 device that the company should have led with, ahead of its all-touch Z10. That’s because it sports a hardware QWERTY keyboard, something that has become a unique distinction among top-tier smartphones these days. BlackBerry tells me they wanted to nail the all-touch experience first, in part to prove that they could, but based on my last few days with the Q10, this is the phone that’s more deserving of the “flagship” moniker for the new BlackBerry fleet.

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