Category: Digital world

Elon Musk’s X won’t be regulated under the European Union’s Digital Markets Act (DMA) the Commission decided Wednesday, despite the social media platform hitting usage thresholds earlier this year.

The decision means X won’t be subject to the DMA’s list of operational ‘dos and don’ts’ — in areas like its use of third party data and user consent to tracking ads — for the foreseeable future. The pan-EU regime targets Big Tech with up-front rules that are generally aimed at ensuring fairer dealing with individual and business users (so far seven companies have been designated as DMA gatekeepers for a total of two dozen “core platform services”, including other social media giants like Meta and TikTok).

While not joining the DMA gatekeeper club is undoubtedly good news for Musk, since he dodges the regulatory risk of being subject to the bloc’s flagship market contestability regime — where penalties for violations can reach up to 10% of global annual turnover (or more for repeat breaches) — the reason for X not being designated may sting his ego: the Commission has decided X is not an important gateway for businesses to reach consumers.

Think of it as the EU throwing shade on the bottom-feeding caliber of X’s ad business these days. Or, tl;dr, if most of your ads are for drop-shipping companies flogging dubious-looking earwax cleaners or polyester rugs so violently patterned they could make a sofa-sitter seasick your business is irrelevance.

Still, X will surely be happy to flutter free of any DMA risk. The platform had submitted arguments against being designated when it notified the EU back in May that it had hit the 45 million monthly active users and 10,000 business users bar. We’ve contacted X’s press line for comment.

“Following a thorough assessment of all arguments, including input by relevant stakeholders, and after consulting the Digital Markets Advisory Committee, the Commission concluded that X does indeed not qualify as a gatekeeper in relation to its online social networking service, given that the investigation revealed that X is not an important gateway for business users to reach end users,” the Commission wrote in a press release.

The EU added that it will continue to monitor developments in X’s market position. In the case of substantial changes in market power it could re-visit the designation issue. But with Musk in charge and continuing to alienate mainstream users, advertisers and businesses that seems unlikely.

While the EU’s DMA won’t be coming for Musk’s X anytime soon, the company does have plenty of regional compliance issues on its plate — including under the bloc’s Digital Services Act (DSA), a sister regulation to the DMA.

Under the DSA, X is expected to comply with general governance rules and an additional layer of requirements in areas like algorithmic transparency and accountability which are reserved for larger platforms.

The Commission, which enforces these extra DSA rules on major platforms, already suspects X of a raft of DSA breaches and has several ongoing investigations that could lead to penalties of up to 6% of its global annual turnover if confirmed. So Musk’s penchant for insulting public officials could still come back to haunt him in the EU.

Airbnb hosting has become a complicated business, from setting up a listing and managing the property to understanding price dynamics, communicating with customers, and tracking earnings. The tricky part is that the more properties hosts manage, the harder it becomes for them to juggle everything. To solve this problem, Airbnb is introducing the Host Network feature, a place where hosts can find top-rated local co-hosts to help manage properties as part of its winter release.

The travel company is setting up a LinkedIn- or Fiverr-like “hosts for hire” network consisting of highly rated local hosts. Currently, Airbnb has onboarded hosts with a rating of at least 4.8 and a minimum of 10 hosted stays. This company has onboard 10,000 hosts onto the network in 10 countries, including Australia, Brazil, Canada, France, Germany, Italy, Mexico, Spain, UK, and the U.S.

These hosts can help with things like listing setup, setting prices and availability, booking request management, guest management, onsite guest support, and cleaning and maintenance. They can set up their own prices for offering these services. The host seeking these services can learn more about co-hosts, their skills related to co-hosting services, and their service rates on the profile page. 

During Airbnb’s Summer 2023 product release, the company introduced features that allow hosts to add co-hosts to have them manage certain tasks. The release also had provisions to pay a percentage of booking to these co-hosts. The company is building a new network on those features.

“One of the requests that we had from hosts is that they would really love to be able to find professional, high-quality cohosts with a great track record in their area whom they can trust. And they can really be completely hands-off,” Judson Coplan, VP of Product Marketing at Airbnb, told TechCrunch.

Airbnb was touted as a passive income vehicle for the longest time. But with more travelers using different services, the expectations for bookings grew. As a result, hosts had to become professionals, and they also saw declining income from property booking. With this network rollout, Airbnb is giving hosts the opportunity to earn money when they are not managing their property.

The company said that hosts on the network currently help manage seven properties on average. 

Besides introducing a host network, the company is rolling out a feature for hosts to see pricing for similar properties in the area, customizable templates for quick replies to guests, and an improved earnings dashboard.

The company is also releasing a slew of updates for guests such as a welcome tour in the app for first time guests,  suggested destinations as well as filters in search, simpler checkout pages, and local payment options including Vipps in Norway, Mobile Pay in Denmark, and MoMo in Vietnam.

Besides these features, Judson also emphasized that the company is exploring using AI for community support when talking about the company’s AI strategy.

“When guests or hosts have questions about how to use the app, cancellations, policies, reservations, and bookings, I think AI can be a really valuable tool in getting answers quickly right in the app,” he said.

The company is already experimenting with using AI to summarize reviews and possibly build an “ultimate concierge” for customers.

While most countries’ lawmakers are still discussing how to put guardrails around artificial intelligence, the European Union is ahead of the pack, having passed a risk-based framework for regulating AI apps earlier this year.

The law came into force in August, although full details of the pan-EU AI governance regime are still being worked out — Codes of Practice are in the process of being devised, for example. But, over the coming months and years, the law’s tiered provisions will start to apply on AI app and model makers so the compliance countdown is already live and ticking.

Evaluating whether and how AI models are meeting their legal obligations is the next challenge. Large language models (LLM), and other so-called foundation or general purpose AIs, will underpin most AI apps. So focusing assessment efforts at this layer of the AI stack seem important.

Step forward LatticeFlow AI, a spin out from public research university ETH Zurich, which is focused on AI risk management and compliance.

On Wednesday, it published what it’s touting as the first technical interpretation of the EU AI Act, meaning it’s sought to map regulatory requirements to technical ones, alongside an open-source LLM validation framework that draws on this work — which it’s calling Compl-AI (‘compl-ai’… see what they did there!).

The AI model evaluation initiative — which they also dub “the first regulation-oriented LLM benchmarking suite” — is the result of a long-term collaboration between the Swiss Federal Institute of Technology and Bulgaria’s Institute for Computer Science, Artificial Intelligence and Technology (INSAIT), per LatticeFlow.

AI model makers can use the Compl-AI site to request an evaluation of their technology’s compliance with the requirements of the EU AI Act.

LatticeFlow has also published model evaluations of several mainstream LLMs, such as different versions/sizes of Meta’s Llama models and OpenAI’s GPT, along with an EU AI Act compliance leaderboard for Big AI.

The latter ranks the performance of models from the likes of Anthropic, Google, OpenAI, Meta and Mistral against the law’s requirements — on a scale of 0 (i.e. no compliance) to 1 (full compliance).

Other evaluations are marked as N/A where there’s a lack of data, or if the model maker doesn’t make the capability available. (NB: At the time of writing there were also some minus scores recorded but we’re told that was down to a bug in the Hugging Face interface.)

LatticeFlow’s framework evaluates LLM responses across 27 benchmarks such as “toxic completions of benign text”, “prejudiced answers”, “following harmful instructions”, “truthfulness” and “common sense reasoning” to name a few of the benchmarking categories it’s using for the evaluations. So each model gets a range of scores in each column (or else N/A).

AI compliance a mixed bag

So how did major LLMs do? There is no overall model score. So performance varies depending on exactly what’s being evaluated — but there are some notable highs and lows across the various benchmarks.

For example there’s strong performance for all the models on not following harmful instructions; and relatively strong performance across the board on not producing prejudiced answers — whereas reasoning and general knowledge scores were a much more mixed bag.

Elsewhere, recommendation consistency, which the framework is using as a measure of fairness, was particularly poor for all models — with none scoring above the halfway mark (and most scoring well below).

Other areas, such as training data suitability and watermark reliability and robustness, appear essentially unevaluated on account of how many results are marked N/A.

LatticeFlow does note there are certain areas where models’ compliance is more challenging to evaluate, such as hot button issues like copyright and privacy. So it’s not pretending it has all the answers.

In a paper detailing work on the framework, the scientists involved in the project highlight how most of the smaller models they evaluated (≤ 13B parameters) “scored poorly on technical robustness and safety”.

They also found that “almost all examined models struggle to achieve high levels of diversity, non-discrimination, and fairness”.

“We believe that these shortcomings are primarily due to model providers disproportionally focusing on improving model capabilities, at the expense of other important aspects highlighted by the EU AI Act’s regulatory requirements,” they add, suggesting that as compliance deadlines start to bite LLM makes will be forced to shift their focus onto areas of concern — “leading to a more balanced development of LLMs”.

Given no one yet knows exactly what will be required to comply with the EU AI Act, LatticeFlow’s framework is necessarily a work in progress. It is also only one interpretation of how the law’s requirements could be translated into technical outputs that can be benchmarked and compared. But it’s an interesting start on what will need to be an ongoing effort to probe powerful automation technologies and try to steer their developers towards safer utility.

“The framework is a first step towards a full compliance-centered evaluation of the EU AI Act — but is designed in a way to be easily updated to move in lock-step as the Act gets updated and the various working groups make progress,” LatticeFlow CEO Petar Tsankov told TechCrunch. “The EU Commission supports this. We expect the community and industry to continue to develop the framework towards a full and comprehensive AI Act assessment platform.”

Summarizing the main takeaways so far, Tsankov said it’s clear that AI models have “predominantly been optimized for capabilities rather than compliance”. He also flagged “notable performance gaps” — pointing out that some high capability models can be on a par with weaker models when it comes to compliance.

Cyberattack resilience (at the model level) and fairness are areas of particular concern, per Tsankov, with many models scoring below 50% for the former area.

“While Anthropic and OpenAI have successfully aligned their (closed) models to score against jailbreaks and prompt injections, open-source vendors like Mistral have put less emphasis on this,” he said.

And with “most models” performing equally poorly on fairness benchmarks he suggested this should be a priority for future work.

On the challenges of benchmarking LLM performance in areas like copyright and privacy, Tsankov explained: “For copyright the challenge is that current benchmarks only check for copyright books. This approach has two major limitations: (i) it does not account for potential copyright violations involving materials other than these specific books, and (ii) it relies on quantifying model memorization, which is notoriously difficult. 

“For privacy the challenge is similar: the benchmark only attempts to determine whether the model has memorized specific personal information.”

LatticeFlow is keen for the free and open source framework to be adopted and improved by the wider AI research community.

“We invite AI researchers, developers, and regulators to join us in advancing this evolving project,” said professor Martin Vechev of ETH Zurich and founder and scientific director at INSAIT, who is also involved in the work, in a statement. “We encourage other research groups and practitioners to contribute by refining the AI Act mapping, adding new benchmarks, and expanding this open-source framework.

“The methodology can also be extended to evaluate AI models against future regulatory acts beyond the EU AI Act, making it a valuable tool for organizations working across different jurisdictions.”

The United Kingdom’s NHS — the world’s largest public health service — is working on creaking IT infrastructure. In any sector, that’s a ticking time bomb. But when you consider that the NHS holds medical records for nearly 67 million people, a breach of that system could become a meltdown. This article from the Financial Times (paywalled) is ringing the alarm bells from the perspective of doctors.

“I am at a top London hospital and yet at times I feel as though we are operating in the stone age,” one doctor told the FT. For example, doctors email lists of patients to themselves to print out elsewhere. Some 13.5 million working hours estimated to be lost annually due to inadequate IT systems.

On the NHS side, it may sound like things are broken, but on the tech side, there are probably a lot of biz-dev folks rubbing their hands together. The NHS itself works with a long list of suppliers and also began a relationship with Google’s DeepMind almost a decade ago. All of that is only going to see more activity: dozens of companies are building AI-enabled “scribes” to help doctors and other clinicians handle extensive admin work; AI is also being applied to drug discovery.

Yes, this FT article is based on subjective experience, and on the surface you might think IT complaints don’t feel monumental. But present the same information to malicious hackers and you don’t know how it might get used. We just hope the next news cycle won’t be about a gigantic data breach.

As calls for urgent climate action persist, technologies to help remove the heat-trapping greenhouse gases from the atmosphere are also emerging globally.

In Africa, Octavia Carbon, a Direct Air Capture (DAC) startup is leading the efforts. Octavia, founded in Kenya two years ago, builds DAC machines that it uses to capture carbon, a greenhouse gas that is the biggest contributor of global warming, from the air for storage underground.

Octavia, which begun capturing carbon in February after a period of developing the tech, now plans to build more machines to add to its existing two devices with a carbon capture capacity of 50 tonnes per year. This comes as the startup plans to scale carbon removal in Kenya after closing a $3.9 million seed round and, it says, $1.1 million in the advance sale of carbon credits.

Octavia raised the equity funding in a round co-led by Lateral Frontiers and E4E Africa, with participation from Catalyst Fund, Launch Africa, Fondation Botnar, and Renew Capital.

Octavia’s co-founder and CEO Martin Freimüller, told TechCrunch the startup expects to reach a capture capacity of 1,500 tons per year beginning in 2025 when operating at capacity and a storage site run by partner company Cella Mineral Storage comes online.

“We’ve been developing the tech and now we’re taking it out of the lab for carbon removal at scale in the field,” said Freimüller, who co-founded the startup with Duncan Kariuki, a mechanical engineer.

Freimüller explained that while Octavia captures carbon from air and liquefies it, the startup has teamed up with Cella, a carbon sequestration startup that will inject it into the ground for storage.  

Injection of the startup’s first batch of captured carbon is expected to happen before the year ends, and Freimüller said the project will be among the first ones in the world to turn captured carbon into rock underground.

“Once we have that liquid carbon dioxide, we give that to our storage partner, and they would sort of inject it underground at high pressures to seep into volcanic rock pores, and those are quite rich in calcium and magnesium that reacts with the CO₂ to form carbonate minerals like calcium carbonate or limestone,” said Freimüller. “Naturally occurring materials, naturally occurring process and we’re just accelerating that in geologic areas where that hasn’t really happened over long periods of time.”

Kenya’s competitive edge

Freimüller said the geology of Kenya was one of the reasons the startup set up operations locally, explaining that the country’s Rift Valley region has the right rock formation for carbon storage.

“Kenya is really unique in having the East African Rift Valley, and that is really important for two reasons. The geology is great because it has porous rocks, volcanic rocks — specifically basalts . . . that actually can store CO2 underground. And the capacity of that geology is huge. You could store all of humanity’s cumulative CO2 to date in just Kenya, basically, because we have something like 8,600 cubic kilometers of that pore space in the East African Rift Valley,” he said.

Capturing carbon from air is also energy intensive, and for Octavia, the abundance of renewable energy, especially geothermal, in Kenya was the other factor that inspired the founders to set up operations in the East African country. They say using renewable energy gives Octavia a competitive edge over its peers in the developed world that use fossil fuels for their DAC operations, then buy renewable energy credits (which is counter-productive).

Globally, 27 DAC plants with capture capacity of 0.01 Mt CO₂ per year have been commissioned in Europe, North America, Japan and Middle East. Out of these plants, only Climeworks Orca plant in Iceland, which became operational in 2021; the Global thermostat headquarters plant in Colorado; and the Heirloom facility in California, both of which launched last year, currently capture more than 1,000 tons of CO2 per year.

More are expected as the industry grows. In fact, 130 DAC facilities are currently under development globally to capture 65 MtCO₂ per year, a capacity needed by 2030 to realize net zero emissions by 2050.

Freimüller says it will not be an easy undertaking, but it is doable.

“Who would have thought that you can move an SUV around on batteries? That has been done too and that’s ultimately the power that engineering has to sort of change the perimeters within what’s possible,” he said.

Freimüller worked previously at Dalberg, a global consulting firm, focused on international development strategies. It’s where he first came across the massive opportunities that the climate sector presents.

His startup has since grown to a team of 60, 40 of whom are engineers doing research and development, with the others focusing on bench scale chemistry, which involves testing materials, methods and chemical processes.

As Octavia, an Xprize Carbon Removal finalist, scales its operations, it aims to offer more DAC and storage carbon credits to grow its revenues. The startup says the Danish carbon removal marketplace Klimate is one of its largest clients, and that it has secured 12 altogether so far.

“For a deep tech company, it’s unusual to have that many customers at seed stage,” said Freimüller. “It took a lot of work to do to bring on these customers, but it’s also fair to say that there’s a lot of demand in the market for what we’re doing.”

The retail sector needs Inventory planning to maintain margins and meet demand. This is getting harder because there are now many distribution channels, more complex supply chains, and shorter sales cycles. Mid-market retailers and premium brands have less firepower than the retail giants and tend to rely on legacy software.

Founded in 2020, Autone aims to forecast demand, and aid sales, while cutting waste and manual tasks. 

The company has now raised a $17 million Series A funding round, led by General Catalyst. Previous investors also participated, including Speedinvest, YCombinator, Seedcamp, 2100VC, Motier, Financière Saint James, and angels from LVMH, Sephora, and Moncler. The new funding takes the total raised for the company to $20 million, including a $3 million Seed round led by Speedinvest. Its competitors include Anaplan, BlueYonder and Relex.

Born and raised in Paris, Autone co-founder and CEO Adil Bouhdadi first got into sneaker culture in the early 2000s. Later, he wanted to enter the luxury fashion business, but with few connections, he decided to incessantly refresh the LVMH career website until an internship at Givenchy came up. He ended up spending six months shadowing the CEO.

After a Masters’s Degree in 2013, he got a break at Alexander Wang in New York, moved to Victoria Beckham in London, and joined Alexander McQueen in 2015. 

While there, Bouhdadi and colleague Harry Glucksmann-Cheslaw (now Autone CTO) both worked on an internal inventory platform which, they claim, helped the brand’s revenue increase substantially over the following five years. The co-founders are a Muslim and Jewish pairing. Adil comes from a Muslim family (his parents moved to Paris from Morocco) and his co-founder comes from a Jewish family who moved to the UK to escape the Holocaust.

Bouhdadi (now CEO) told TechCrunch: “At Alexander McQueen we realized everyone in the company was just literally using Excel. The biggest pain point for any retail company is that they all operate in silos. We created the alpha version to Autone there.”

He said Autone can now look at a retail brand’s products in the next 12 months: “You can purchase raw materials in one month instead of three, reduce the inventory risk, and have a variable supply chain.”

Autone now counts companies such as Courreges,  Roberto Cavalli,  Stussy, and Zadig&Voltaire amongst its customer. 

David Karandish has been busy.

Capacity, his support automation company, was planning a $5 million “bridge round” to help the company reach the break-even point. But TVC Capital, Toloka.vc, and the venture’s other backers had something grander in mind. So they threw in an additional $21 million for what became Capacity’s $26 million Series D.

While all this was happening, Capacity acquired three companies: enterprise search firm Lucy (which had raised $5.6 million) and two startups focused on customer service automation, Linc and Envision.

“It’s an exciting time of transformation at Capacity as we grow to help brands do more to automate interactions with customers and team members,” Karandish told TechCrunch. “We’re at an inflection point for AI and many businesses are realizing that they need a complete platform to be successful, rather than cobbling together a bunch of point solutions.”

Karandish co-founded Capacity with Chris Sims in 2017 as a part of Equity.com’s incubator program. After the $900 million exit of Answers.com (which Karandish also co-founded), Karandish says he wanted to start a business to address what he perceived as major blockers in customer service operations.

“Rising costs have placed pressure on support teams to do more with less,” Karandish said. “At the same time, consumer expectations are shifting rapidly where consumers both want self-service but are increasingly frustrated by lackluster experiences. Our goal with Capacity is to provide a great customer experience while also recognizing that escalating to a human is the right thing to do in many cases.”

Capacity connects to a company’s tech stack to answer queries and automate support tasks. The platform mines information from files, apps like Gmail, customer relationship management software, and more to build a knowledge base that Capacity’s chatbot and helpdesk tools can pull from.

Employees can ask Capacity’s chatbot questions like “What was added to the merger contract yesterday?,” or even instruct it to do things like updating the status of a sales lead. The chatbot and helpdesk can also deliver company-wide announcements, like news and event notifications. And they can be made external-facing (with filters to hide sensitive data, mind you), embedded on a company’s website to answer common customer questions.

“We view Capacity as having the ease-of-use of a tool like Zendesk with the automation chops of a ServiceNow,” Karandish said. “From an approach standpoint, we are executing a very similar playbook to Parker Conrad’s ‘compound model’ — except in our case, we’re focused on support.”

Innovations in self-service software — including AI — are making them a more attractive solution to companies than they have been in the past. For example, Cleverly.ai — which Zendesk acquired in August 2022 — finds answers to customers’ questions by creating a knowledge layer on top of applications. Meanwhile, Directly taps algorithms trained by subject-matter experts to strategically answer customer issues in a variety of different messaging channels.

Customers like self-service options. According to a Zendesk poll, 67% prefer them over interacting with customer support. But it can be difficult to get them right. A Gartner survey found that, on average, only 14% of customer service and support issues are fully resolved in self-service.

Capacity will upgrade and expand its product portfolio through its recent acquisitions.

Karandish sees Lucy’s offering, which ingests and analyzes data from enterprise apps and systems, augmenting Capacity’s existing indexing technology. Envision, meanwhile, will help Capacity customers flag unresolved chats and calls and train human agents. And Linc will bring self-service tools for retail and e-commerce to Capacity, said Karandish.

The plan is for Lucy’s co-founders, Dan Mallin, Scott Litman, and Marc Dispensa, to join Capacity to help lead products and teams integration. Envision CEO Rodney Kuhn will oversee contact center solutions at Capacity, and Linc founder and CEO Fang Cheng will lead Capacity’s e-commerce efforts.

To date, Capacity has acquired eight companies — the other five being Textel, LumenVox, Denim Social, SmartAction, and Cereproc — and raised more than $89 million.

Karandish said that the newest tranche will be put toward growing Capacity’s headcount to 200 people by the end of the year as the Saint Louis-based company “heads toward profitability.” Capacity’s customer base now stands at over 2,500 brands, he added, while its annual recurring revenue is nearly $50 million.

“Our growth strategy reflects what our customers are asking for: an all-in-one AI platform that delivers across all communication channels,” he added. “We’ve identified 24 steps of the customer experience that are ripe for support automation … Each acquisition adds specific tech and talent to help Capacity become a leading provider of AI-powered solutions for customer and employee experience.”

From Switzerland’s Founderful to Italians Founders Fund and the Dutch Operator Fund, a new crop of European VC firms claim to operate as “entrepreneurs backing entrepreneurs.”

Although it might still be early to call it a trend, Swedish fund Node.vc has now joined this group, with €71 million in funding to deploy into startups across the Nordics and Baltics.

“I hope it is a beginning trend,” Node.vc managing partner John Elvesjö told TechCrunch. “Europe has been significantly behind the U.S. when it comes to operational experience in VC investors….There’s a lot of marketing around being founder-led and operator experience, but when you scratch the surface, it’s usually pretty thin.”

Node.vc’s ties to entrepreneurship run deeper than surface-level. That’s true of its investment team — Elvesjö, (second-to-last on the right in the picture ) co-founded Swedish eye-tracking startup Tobii, which went public in 2015. But that’s also true of its limited partners, which include 70 founders. While they have no obligation to add more than money, they have a natural penchant to invest their time, too.

However, Node.vc would likely have been unable to close a fund of this size if it hadn’t also secured institutional investors. Its LPs include Saminvest, Sweden’s fund-of-funds, and the life and pension arm of Nordic bank Nordea. That’s noteworthy for a first fund, and doubly so for one that takes an unusual approach to VC math.

“We have a team that is deliberately a bit oversized, meaning that we are more people on the team than what the fund can normally finance. And the reason for this is we are entrepreneurs and we are building a VC firm,” Elvesjö said.

With eight full-time and eight part-time staffers, several of whom previously worked at Nordic VC firm Brightly Ventures, Node.vc should have enough hands on deck for the seven startups it plans to back each year. 

The rest of the equation is more typical for a fund of that size. “We write an average entry ticket of €1.3 million euro, and we can follow on for a very long time,” Elvesjö said. “We can actually invest even up to 10 million euro in one single company if we want.”

With three deals already, the fund is sector-agnostic, but focuses on three themes. There’s future of entertainment, represented by portfolio company Roro, a gaming studio; future of work, with Lemonado and Starhive; and platform technologies, which include fintech, IoT, cloud infrastructure, and machine intelligence.

These themes correlate with the strengths and sectors the Nordics are known for, but Elvesjö and his partners only realized this after putting a significant amount of effort into research.

“We did this enormous investment in figuring out where trends are going, and then we condensed it and put it in a slide, and what the slide says is we think the Nordic ecosystem will be good at what it has been good at before,” he laughed.

Paradoxically, the fact that several Scandinavian unicorns let people go could also be beneficial for its startup scene. According to Elvesjö, “talent in the Nordics is more available than it’s been for the last five years.” That’s what makes Node.vc particularly bullish about its geography: AI tools are set to “disrupt pretty much every industry,” and the Nordics are “extremely well positioned to harvest this.”

Sophia Tung set up a livestream this past summer, showing self-driving Waymo cars honking from the San Francisco parking lot near her apartment at all hours of the night.

As a kind of apology for the nuisance, Waymo threw an ice cream party in Tung’s building and gave Tung, a software engineer, some promo codes redeemable for free rides.

The outfit may have underestimated her. After giving a few friends some codes, Tung – realizing the codes weren’t capped in value – determined she’d use her last one to ride in a Waymo for 24 hours, visiting tourist destinations like Golden Gate Park, Chinatown, and Twin Peaks. Alas, 83 miles and 6.5 hours later, her Waymo ended the ride with 20 miles left, cutting short her plans.

It was seemingly for the best.  Said Tung as she tried to regain feeling in her legs after the long ride, which ended back in her neighborhood: “Six hours and 30 minutes; I’m never doing that again.”

Meet Storio, a French startup that’s focused on providing smart energy storage for commercial and industrial customers. Founded in 2023, the startup raised a €5 million seed round earlier this year (around $5.5 million at current exchange rates) and has signed its first client.

Storio believes solar panels have a bright future. But the company also wants every solar panel to come with a battery to optimize production. Its target customers are other businesses who may not feel they have the time or expertise to join all these technical pieces themselves.

Instead of building or selling standalone batteries, Storio has a more interesting distribution strategy: after performing a technical and revenue simulation, it partners with battery suppliers and civil engineering companies to turn a project into an energy storage installation.

Over the past few years, many commercial and industrial companies have built large solar panel installations to lower their electricity bills. Storio wants to complement (and tap into) these existing installations by offering an energy storage solution that can enable its customers to optimize their consumption of solar energy — thanks to Storio’s battery management software.

Once batteries are live, Storio remotely manages them to optimize consumption, as well as energy storage and release in general.

Typically, batteries are charged during the day and energy is released in the morning and evening — but Storio’s software allows for smarter stuff like price-conscious energy management.

“That’s the starting point. You have solar panels. Solar panels produce a lot of energy in the middle of the day. Let’s store it, so you can use it yourself and save money,” co-founder and CEO Jean-Yves Stephan told TechCrunch.

For example, Storio can charge batteries from the grid during off-peak hours so that a client doesn’t need to use as much electricity during peak times. As many industrial companies have suffered from expensive energy contracts over the past few years, partnering with Storio is a way to reduce the risks associated with fluctuations in the energy markets.

“The core of our value proposition is to optimize energy flows, either to create savings on our customer’s bill, or to generate additional income from the power grid,” Stephan said.

Storio batteries are also certified in France by Enedis and RTE to contribute to the stabilization of the grid. This means Storio can elect to release energy from the fleet of batteries it manages into the grid for a short period of time when there’s a demand peak — enabling it to generate revenue as a result of this contribution to the grid.

In this case it can even be more lucrative for a Storio customer to release energy from their batteries instead of consuming the energy themselves for their core business purpose.

“Stabilizing the network involves fairly technical mechanisms, such as stabilizing the network frequency. The grid frequency must be 50Hz [in Europe]. As it rises a little above or falls a little below, the battery reacts. It can also be used to buy and sell energy, like an ‘energy trader,’” Stephan added.

The energy trading part is an essential component of the startup’s proposition as it can greatly reduce the time it takes to amortize a Storio installation.

The company estimates a customer can get a return on investment after five or six years — but batteries can last for up to 15 years (when they end up with roughly 70% of their initial capacity).

Storio and each industrial partner that hosts its battery management installation will have a profit-sharing agreement. “It’s very important to align interests because, as you say, we have to make some tradeoffs. If we were saying ‘savings are for you, network revenues are for Storio,’ that would be unfair,” Stephan said.

Lowercarbon Capital is leading Storio’s seed funding round with Bpifrance’s Large Venture fund also acquiring an equity stake in the startup. Kima Ventures and several business angels are also investing in the startup, including the founders of Bump, Electra, Elum Energy, Enspired and Greenly.

Several other companies that have been working on on-site battery management include GridBeyond in the U.K., Stabl in Germany and Stem in the U.S. As regulation varies from one region to another, Storio seems well positioned to tackle the French market and potentially other European countries in the future.