Business

Gov’t to start looking for bias in small business lending

Banks will need to start reporting the demographics and income of small business loan applicants under new rules published by the Consumer Financial Protection Bureau on Thursday.

It’s a move that policymakers hope will lead to less discrimination and more transparency in the small business lending market, similar to how other laws have regulated the residential mortgage market for decades.

Under the Dodd-Frank Act, Congress mandated the bureau to start collecting data on small business lending decisions to look for patterns of discrimination. Implementation of the rule has taken more than a decade, and the bureau was sued by the California Reinvestment Coalition for its failure to start collecting this data.

Bank regulators have for decades collected data on residential mortgage applicants — including race, geography, whether the loan was approved and the interest rate — under a 1970s era law known as the Home Mortgage Disclosure Act. The data collected under HMDA has long been used by regulators and the public to look for potential signs of banks discriminating against borrowers, also known as redlining.

The size of the small business lending market is roughly $1.4 trillion, according to the CFPB. But there’s not much data on how banks and non-banks decide who to approve or deny for loans, and there’s no way of seeing — outside anecdotal reports — whether banks have discriminated against black and Latino small businesses.

“The impact of the rule will be in the comprehensive data that it produces, which can be used by lenders, borrowers, and the broader public to achieve better credit outcomes for small businesses and communities across the country,” said Rohit Chopra, director of the bureau, in a prepared statement.

Small business create roughly 60% of new jobs in the U.S., and the U.S. government puts billions of dollars of resources into supporting the creation of new businesses. During the pandemic, Congress gave $800 billion to small business through the Paycheck Protection Program to keep them operating.

While the bureau has issued its final rule on this issue, it make take a few years for the public to get access to the data. Banks will have to implement systems internally to start collecting the data, regulators will need systems to ingest it, and there will be a waiting period before the data is released.

Banks that originate at least 2,500 small business loans annually must start collecting the data in October 2024, with smaller banks having to collect the data in 2025 and 2026 depending on their size.

Business

Amid the AI hype, don’t forget about no-code

No-code startup Softr, which allows its customers to build apps from their existing data, announced Tuesday that it has added Google Sheets to its integration list.

Previously, Softr focused on Airtable databases. Its move to support data from Google’s spreadsheet product likely expands its potential customer pool. Even before that expansion, CEO Mariam Hakobyan told TechCrunch+ that her company grew its annual recurring revenue 3x from December 2021 to December 2022.

Softr’s quick revenue expansion is a good reminder that while the tech world seems completely consumed by all things AI, there’s quite a lot of work going on in other areas that are worth keeping an eye on.

That said, there is an interesting connection between AI and no-code worth writing down: Both are potentially great expanders of human capability. AI tooling could operate as a second brain of sorts for the digitally busy, and no-code services may allow nondevelopers to build the tools they need to complete their work. In both cases, the genres of new tech development have a shot at helping regular folks do a lot more, more quickly and often at a low cost.

Something else that modern AI tooling and no-code share is accessibility. Softr, for example, grew its base of signed-up users from 35,000 to 150,000 in 2022. That’s really quite a lot for a service that was, until recently, Airtable-specific. On the AI side, I don’t need to reiterate just how much market demand there is for modern LLM tooling.

Let’s dig into Softr’s progress since we last covered the company and chat about what we can learn about no-code progress as a method of building more accessible software.

Softr, no-code and empowering the regulars
Ask anyone who works at a company that builds software and isn’t part of the engineering or product orgs how long it will take them to get something built for their own needs. Without even making Jira ticket jokes, we all know what the answer will be. And to a degree, the standard situation makes sense: What nondeveloper employees need is often pretty basic software, and expensive engineers need to focus on the company’s core offering not internal tooling.

Business

Twitter’s legacy blue checkmark era is officially over

Twitter appears to have officially killed off its legacy blue checkmarks, one of the last remaining vestiges of the pre-Elon Musk owner era.

The legacy blue checks, which Twitter doled out to journalists, celebrities and other public officials for free to help curb impersonations and spam, were supposed to end April 1.

Musk took to Twitter on April 11 — days after the legacy checkmarks should have disappeared — to shift the end date to April 20 or 4/20. Yes, that’s the day when folks honor weed because Twitter is now owned by a middle schooler.

With the legacy checkmarks gone, Twitter will have verification marks only for paid users and businesses as well as government entities and officials. Now, if a user sees a blue checkmark and clicks on it, the label reads: “This account is verified because they are subscribed to Twitter Blue and verified their phone number.”

Business

Autotech Ventures’ new $230M mobility fund adds fintech, circular economy to its investment strategy

Autotech Ventures will use its newly closed $230 million fund to expand beyond its foundation of early-stage ground transportation startups and invest in what the firm believes are the next big opportunities in automotive and mobility.

Fintech, logistics, supply chain and the circular economy are at the top of the list.

The $230 million fund, its third since launching in 2017, will be used to invest in seed through Series C mobility-related startups, according to the company. A mixture of financial and corporate LPs, including Allison Transmission, American Axle, Iochpe-Maxion and Shell participated in the fund.

“We’re still a ground transportation-focused firm and we have a very similar strategy [with this fund],” Alexei Andreev, Autotech Ventures managing director told TechCrunch. “On a high-level, it’s same as Fund 1 and Fund 2. However, one of the fastest areas of growth is SaaS-enabled fintech. Auto commerce is inefficient and there are large pockets of profit to capture.”

The firm is particularly interested in transportation-related fintech ventures that are poised to grow during a recession.

“We made a prediction that sooner or later there will be a recession and we identified areas that benefit when the economy softens, Andreev said, noting that this latest fund invested in Yendo, a Dallas-based startup (formerly known as Otto) that lets customers borrow against their vehicles at the same interest rate as standard credit cards.

Autotech Ventures’ previous fintech investments include U.K.-based buy now, pay later startup Bumper and Carpay, a buy here, pay here loan servicing SaaS platform for car dealers.

Andreev said the firm is also investigating investment opportunities in the circular economy, a nascent industry focused on finding ways to reuse materials and products. Circular economy startups have garnered an increasing amount of attention and investment as automakers transition away from gas-powered vehicles and towards EVs.

Autotech Ventures is also cautiously wading into generative AI, although Andreev was quick to note that the company has not made any investments in that area.

Autotech has more than $500 million under management and has invested in more than 40 companies.

Some of the firm’s investments include computer vision startup DeepScale (which was acquired by Tesla), Lyft, used vehicle marketplace operator Frontier Car Group, Drover, Outdoorsy, Swvl, parking app SpotHero and Xnor.ai, which Apple acquired in January 2020. Five of those startups have gone public, including indie Semiconductor and Volta Charging.

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