Cleveland offered $120 million in freebies lure Amazon to the city

A Cleveland.com article detailed the lengths the small midwestern city would go to lure Amazon’s in 50,000-person HQ2. In a document obtained by reporter Mark Naymik, we learn that Cleveland was ready to give over $120 million in free services to Amazon including considerably reduced fares on Cleveland-area trains and buses.

The document, available here, focuses on the Northeast Ohio Areawide Coordinating Agency (NOACA)’s ideas regarding the key component in many of Amazon’s decisions – transportation.

Ohio has a budding but often tendentious connection to public transport. Cities like Columbus have no light rail while Cincinnati just installed a rudimentary system. Cleveland, for its part, has a solid if underused system already in place.

That the city would offer discounts is not surprising. Cities were falling over themselves to gain what many would consider – including Amazon itself – a costly incursion on the city chosen. However, given the perceived importance of having Amazon land in a small city – including growth of the startup and tech ecosystems – you can see why Cleveland would want to give away plenty of goodies.

Ultimately the American Midwest is at a crossroads. It could go either way, with small cities growing into vibrant artistic and creative hubs or those same cities falling into further decline. And the odds are stacked against them.

The biggest city, Chicago, is a transport, finance, and logistics hub and draws talent from smaller cities that orbit it. Further, “smart” cities like Pittsburgh and Ann Arbor steal the brightest students who go on to the coasts after graduation. As Richard Florida noted, the cities with a vibrant Creative Class are often the ones that succeed in this often rigged race and many cities just can’t generate any sort of creative ecosystem – cultural or otherwise – that could support a behemoth like Amazon landing in its midst.

What Cleveland did wasn’t wrong. However, it did work hard to keep the information secret, a consideration that could be dangerous. After all, as Maryland Transportation Secretary Pete K. Rahn told reporters: “Our statement for HQ2 is we’ll provide whatever is necessary to Amazon when they need it. For all practical purposes, it’s a blank check.”

Capital One acquires digital identity and fraud alert startup Confyrm

Capital One has acquired the San Francisco-based digital identity and fraud alert startup Confyrm, the company announced through a blog post on Thursday. The deal will bring Confyrm’s technology to the bank in order to help speed its development and implementation of consumer identity services at scale.

CEO Andrew Nash founded Confyrm in 2013, along with Dale Olds and Emma Lindley, with a vision of restoring trust in digital identities, he says.

“We recognized that despite an increasing reliance on digital identities, consumer trust in those identities continued to erode,” explains Nash. “We wanted to make a real difference to reducing online fraud and to make the internet a safer place for everyone engaged in it, but critically to do this without abusing customer privacy and storing personal data.”

The company created a system to offer early notifications of suspicious account activity, in order to mitigate the impact of fraud or account theft for identity providers and consumers alike. The system also uses privacy-enhancing mechanisms to protect the identities of the individual consumers and the event publishers.

For example, if a financial service was processing a password reset request but detected that the consumer’s email account had been taken over by a fraudster, it could stop the attack on the consumer’s account immediately. Meanwhile, the consumer could be alerted at the same time to take additional steps to secure their account.

Before starting Confyrm, Nash had previously served as Director of Identity Services at Google, one of the largest providers of consumer identity services in the world, with over a billion consumer and enterprise accounts. He also served as Senior Director of Consumer Identity at PayPal, managing over 350 million identities validated for use in the financial services space, and was Director of Technologies at RSA Security.

So for Capital One, the acquisition of Confyrm isn’t just about the technology itself – it’s about bringing Nash on board.

Following the deal’s close, Nash will become Managing Vice President of Consumer Identity Services.

He says working at Capital One will help the team reach more consumers than a startup could on its own, allowing them to “massively increase the set of consumers that we can help to protect.”

It’s unclear how far along Confyrm was on actually bringing its product to consumers – its website touted a few pilot programs several years ago, but hadn’t been updated in some time. Some of the site’s text is still “Lorem Ipsum” filler text, in fact, and there’s been little coverage by press in the years since its founding. The company hadn’t talked much about its pilot partners, but the list was reported to include an internet email provider, mobile operator, financial services company, and multiple e-commerce sites. Likely, Capital One was the early partner, which is what later led to this acquisition.

On the National Institute of Standards and Technology (NIST) website, one of Confyrm’s pilot programs was listed, noting pilot partners included InCommon, Google, AOL, LinkedIn, and Microsoft. (AOL merged with Yahoo to form Oath, which also now owns TechCrunch.)

Deal terms regarding the Capital One acquisition were not being shared, but Confyrm had raised $1.2 million, according to Crunchbase, which attributes the funding to a grant. (Another source states the grant was for $2.4 million, however).

Acquiring an early stage startup isn’t rare for Capital One, which regularly picks up young companies to fuel its company with fresh talent and unique IP. Over the past several years, it’s acquired mobile savings startup BankOns, local business directory Bundle, budgeting app Level Money, design and development firm Monsoon, design firm Adaptive Path, price tracker Paribus (which launched at TechCrunch Disrupt), and secure container orchestration platform Critical Stack. 

There’s a video of Nash explaining how Confyrm works, here.

Pandora shares up 8% after surprise earnings beat

Pandora’s quarterly earnings report was music to investor’s ears.

The digital radio platform reported a better-than-expected first quarter report after the bell on Thursday, sending shares up 8% in after-hours trading.

Wall Street liked that the company showed a sizable increase in subscriber revenue, posting $104.7 million, a 63% increase from last year. Pandora has 5.63 million paid listeners, up 19% from the same timeframe in 2017.

By contrast, Apple Music says it has 40 million subscribers and Spotify has 75 million, so Pandora is a distant third in terms of paid users.

But the competition is already reflected in Pandora’s stock price. It closed Thursday at $5.75, which is up a buck for the past month. It’s also substantially beneath the $37 per share that the stock was trading at in 2014. Its market cap is currently $1.45 billion.

In addition to subscribers, Pandora makes money from its unpaid users via ads. The company had 72.3 million active listeners, bringing in $319.2 million in revenue. Analysts had expected $304.3 million.

Its adjusted loss per share was 27 cents, well above the negative 38 cents that Wall Street forecast.

“Pandora is exactly where we want to be: at the center of a growing market with huge potential,” said Roger Lynch, CEO of Pandora, in a statement.

 

 

 

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