Technology

China is rising in many ways — the economy, consumer spending and technology — but still many of its population looks overseas, and particularly to the West, for cues on lifestyle and health. Thata theme thatbeing seized by LemonBox, a China-U.S. startup that lets Chinese consumers buy U.S. health products at affordable prices.

Indeed, the recent scare around Chinese vaccinations, which saw faultyinoculations given to babies and toddlers in a number of provinces, has only fueled demand for overseas health products which LemonBox founderDerek Weng discovered himself when his father was diagnosed as having high blood sugar levels. Weng, then working in the U.S. for Walmart, was able to look up and buy the right medicine pills for his father and bring them back to China himself. He realized, however,that others are not so fortunate.

After polling friends and family, he set upan experimental WeChat app in 2016 that dispensed health information such as articles and information. Within a year, it had racked up 30,000 subscribers and given him the confidence to jump into the business fully.

Today, LemonBox allows Chinese consumers to buy its own-branded daily vitamin packs from the U.S.. Further down the line, the goal is to expand into more specific verticals, including mother and baby, beauty and daily supplements, according to Weng, who believes that the timing is good.

&For the first time in China, people are taking a major interest in health and are working out, while society is becoming more developed,& he told TechCrunch in an interview. &We estimate that Chinese consumers are investing 30 percent of their income in health.&

The LemonBox daily pack of vitamins.

Since its full launch three weeks ago, LemonBox has pulled in 700 customers with 40 percent purchasing a three-month bundle package and the remainder a monthly order, Weng said. Typical basket size is around 300 RMB, or nearly $45.

To get the business off the ground, Weng needed expert support and his co-founderHang Xu — who is also LemonBox&Chief Nutrition Scientist& — has spent 10 years in the field ofnutrition science. Xu holds a Ph.D. from Texas A-M University, is a U.S.-registered dietitianand has published over 10 research papers. The startupthird co-founder,Eddy Meng (CMO), is a graduate of Chinese app store startupWandoujia which sold to Alibabatwo years ago.

Right now, LemonBox has offices in the U.S. and China and itis squarely focused on e-commerce but Weng said the company is looking to introduce other kinds of health services. That could include consultations with dietary experts and specific offerings for patients leaving ahospital or in other long-term care situations, as well as potentially own-label products.

&We look at Stitch Fix for inspiration,& Weng said. &Right now, itleverages data to develop its own in-house private label products that improve on margin and the accuracy of recommendations. This kind of data and further services will be the next stage for us.&

LemonBox raised a seed round in March, which included participation from Y Combinator, and as part of Y Combinatorcurrent program, it&ll present to prospective investors at the programdemo day. Already, though, Weng said therebeen interest from investors which the company is thinking over.

Interestingly, it was forth time lucky entering YC for Weng, who had before applied with previous startups unsuccessfully. This time it was entirely circumstantial.He applied to be in the audience for Y Combinator‘Startup School& event that took place in Beijing in May.

Unbeknownst to him, YC picked out a handful of attendees whose companies were of interest, and, after an interview that Weng didn&t realizewas an audition, LemonBox was selected and fast-tracked into the organizationlatest program. In addition, YC joined the startupseed funding round which had initially closed in March.

That anecdotal evidence says much of YCeffort to grab a larger slice of Chinastartup ecosystem.

The organization has aggressively recruited companies from under-represented regions such as India, Southeast Asia and Africa, but China remains a tough spot. According to YCown data, fewer than 10 Chinese companies have passed through its corridors. Thatlow considering that the organization counts over 1,400 graduates.

With events like the one in May, which helped snare LemonBox, and a new China-centric role for partner Eric Migicovsky, who founded Pebble, YC is trying harder than ever.

Apple has followed the lead of Google and Facebook after it removed Infowars, the conspiracy theorist organization helmed by Alex Jones, from its iTunes and podcasts apps.

Unlike Google and Facebook, which removed four Infowars videos on the basis that the content violated its policies, Appleaction is wider-reaching.The company has withdrawn all episodes of five of Infowars& six podcasts from its directory of content, leaving just one left, a show called ‘Real News With David Knight.&

The removals were first spotted on Twitter. Later, Apple confirmed it took action on account of the use of hate speech which violates its content guidelines.

&Apple does not tolerate hate speech, and we have clear guidelines that creators and developers must follow to ensure we provide a safe environment for all of our users. Podcasts that violate these guidelines are removed from our directory making them no longer searchable or available for download or streaming. We believe in representing a wide range of views, so long as people are respectful to those with differing opinions,& a spokesperson told TechCrunch.

Appleaction comes after fellow streaming services Spotify and Stitcherremoved Infowars on account of its use of hate speech.

Jones has used Infowars, and by association the platforms of these media companies, to broadcast a range of conspiracy theories which have included claims 9/11 was an inside job and alternate theories to the San Bernardino shootings. In the case of another U.S. mass shooting, Sandy Hook, Jones and Infowars& peddling of false information and hoax theories was so severe that some of thefamilies of the deceased, who have been harassed online and faced death threats, have been forced to move multiple times. A group is suing Jones via a defamation suit.

In July 2018, the tech sectorleisure class — venture capitalists — kicked investments into overdrive, at least when it comes to financing supergiant venture rounds of $100 million or more (in native or as-converted USD values).

With55 dealsaccounting for just over $15 billion at time of writing, July likely set an all-time record for the number of huge venture deals struck in a single month.

The table below has just the top 10 largest rounds from the month. (A full list of all the supergiant venture rounds can be found here.)

Itcertainly a record high for the past decade. Earlier this month, we set out to findwhen the current mega-round trend began. We found that, prior to the tail end of 2013, supergiant VC rounds were relatively rare. In a given month between 2007 and the start of the supergiant round era, a $100 million round would be announced every few weeks, on average. And many months had no such deals come across the wires.

Of course, that hasn&t been the case recently.

Why is this happening As with most things in entrepreneurial finance, context matters.

There are some obvious factors to consider. At the later-stage end of the spectrum,the market is currently awash in money. Billions of dollars in dry powder is in the offing as venture investors continue to raise new and ever-larger venture funds. All that capital has to be put to worksomewhere.

But thereanother, and perhaps less obvious, cog in the machine: the changing part VCs play in a companylife cycle. The current climate presents a stark contrast to the last time the market was this active (in the late 1990s). Back then, companies looking to raise nine and 10-figure sums would typically have to turn to private equity firms or boutique late-stage tech investors, or raise from the public market via an IPO.

Now some venture capital firms are able to provide financial and strategic support from the first investment check a private company cashes to when it goes public or gets acquired. On the one hand, this prolongs the time it takes for companies to exit. But on the other, some venture firms get to double, triple and quadruple down on their best bets.

But as in Newtonian physics, a market that goes up will also come down. The pace of supergiant funding announcements will have to slow at some point. What are some of the potential catalysts for such a slowdown Keep an eye out for one or more of the following:

• U.S. monetary policy could change.As stultifyingly boring as Federal Reserve interest rate policy is, very low interest rates are a major contributor to the state of the market today. With money so cheap, other interest rate-pegged investment vehicles like bonds perform relatively poorly, which drives institutional limited partners to seek high returns in greener pastures. Venture capital presents that greenfield opportunity today, but that can change if interest rates rise again.
• A sustained public market downtrend for tech companies.While everything was coming up Milhouse in the private market, a few publicly traded tech giants got cut down to size. Facebook, Twitter and Netflix all reported slower than expected growth, leading to a downward repricing of their shares. So far, most of the steepest declines are isolated to consumer-facing companies. But if we start to see disappointing earnings from more enterprise-focused companies, or if asset prices remain depressed for more than just a couple of months, this could slow the pace of large rounds and lower valuations.
• Narrowing or vanishing paths to liquidity.For the past several quarters, the count of venture-backed companies that get acquired has slowly but consistently declined, a trend Crunchbase News has documented in its quarterly reporting. At the same time, though, the IPO market has mostly thawed for venture-backed tech companies. Even companieswith ugly financialscan make a public market debut these days. But if IPO pipeline flow slows, or if otherwise healthy companies fail to thrive when they do go public, that could spell bad news for investors in need of liquidity.

All this being said, therelittle sign that the market is slowing down. Crunchbase has already recorded four rounds north of $100 million in the first two days of August. Most notably, ride-hailing company Grab snaggedanother $1 billion in funding(after gulping down $1 billion last month) at a post-money valuation of $11 billion.

If you believe the stereotypes, venture investors are either already on vacation or packing their bags for late summer jaunts to exotic locales at this time of year. But, as it turns out,raising money is always in season. So even though the dog days of summer are upon us, August could end up being just as wild as July.