Sci-Tech

Ampla, a Lender to Consumer Brands, Faces Financial Struggles

Published

1 month ago

May 24, 2024

A popular lender backed by venture capital firms is struggling financially, sending shock waves through the small clothing and home furnishing companies that count on its financing.

The lender, Ampla, spent years courting small direct-to-consumer brands with low rates and a pitch that it understood their needs. In recent weeks, its top executives have been searching for a buyer, two people familiar with the firm’s finances said. Last week, Ampla, which is based in New York, said it would lay off half its 62 workers.

Ampla has also tightened or frozen clients’ lines of credit and told many customers to find other lenders, leaving them in the lurch, according to half a dozen former and current clients. The lender has served online businesses that emerged in the past decade to sell wares like silk knit sweaters, gluten-free cookies and 3-D printers for toys often directly to online shoppers, relying heavily on social media sites for marketing and buzz.

Its troubles appear to be part of a broader reckoning for direct-to-consumer businesses, some of which are no longer growing as rapidly as they once were or are struggling financially. Investors that were eager to back such firms are now being much more cautious.

Ampla, which was founded in 2019, has whittled the number of its borrowers down to around 100 to 150, one of the people familiar with its finances said. Some of those clients say they haven’t found anyone willing to lend to them at rates as low as Ampla’s. Many investors and banks became more wary of working with smaller and relatively untested businesses over the last two years as the Federal Reserve raised interest rates.

Ampla has been under pressure from its own lenders, including one that has stepped in to examine Ampla’s loan book after the firm breached a condition of its borrowing, the two people said.

The troubles began after Ampla unsuccessfully tried to raise more capital late last year and this year, the two people said. The company needed the money to stay in compliance with conditions imposed by its lenders, such as having a certain amount of cash on hand, as well as to fund its business, the people said.

Ampla has previously said its lenders included Citigroup, Goldman Sachs and Waterfall Asset Management. Its investors include the venture capital firms Forerunner Ventures and VMG Partners.

Anthony Santomo, Ampla’s chief executive, and his co-founders, Jim Cummings and Jie Zhou, did not respond to requests for comment. VMG and Forerunner declined to comment.

The Information and Nosh earlier reported on Ampla’s financial troubles and its attempts to find a buyer.

Ampla has catered to firms with around $5 million to $50 million in annual revenue, according to one of the people familiar with its finances. Some of those direct-to-consumer brands weren’t big or established enough to borrow from a bank or another traditional lender.

“Ampla fills the gap in the market,” Forerunner Ventures said in a 2021 blog post.

Ampla customers say that the firm offered them loans at favorable interest rates and that the money allowed them to buy inventory and run marketing campaigns. On its website, the firm posted testimonials from current and former clients that described how Ampla loans allowed them to increase sales or secure distribution through large retailers.

Ben Perkins, founder of &Collar, a men’s dress shirt company, became an Ampla client in April 2022. The firm offered him an annualized interest rate of 17 to 19 percent, nearly half what other lenders required.

During key selling periods like Father’s Day and Black Friday, Ampla would increase his company’s credit line, enabling Mr. Perkins to stock more shirts. At one point, the credit line increased to $3 million, from $1.4 million.

But at the end of last month when Mr. Perkins got on a quarterly call with his Ampla account representative, he was told that &Collar’s credit line had been frozen. The representative suggested that the company find another lender.

“It very much blindsided us,” Mr. Perkins said. “We were not expecting it.”

He has since reached out to about 30 lenders, with some success. Mr. Perkins said he was fortunate not to have suffered the kind of slowdown that other direct-to-consumer companies had. He credits Ampla for helping him double his company’s revenue, which he expects to be about $15 million this year.

But Mr. Perkins worries that other direct-to-consumer companies may struggle to find another lender like Ampla. “I think it’s one of the bigger moments in D.T.C.,” he said. “I think there’s going to be decent fallout.”

Ampla’s origins are closely tied to the rise of the direct-to-consumer business.

Mr. Santomo, Ampla’s chief executive, co-founded Ampla after having been an early employee at Attentive, a start-up that helps brands send personalized texts to potential shoppers. His time at Attentive gave him and his co-founders the idea to create Ampla because they “recognized the opportunity to lend working capital to brands that otherwise would not have access to the scale and cost of capital Ampla could offer,” the 2021 Forerunner blog post said.

Since its founding five years ago, Ampla has raised $51 million in equity and $783 million in debt financing, according to PitchBook, which tracks start-ups and venture capital.

Ampla has used equity capital to lend money to its customers soon after they ask for it, later borrowing an equivalent amount from its lenders. As funds grew tighter this year, Ampla took more time to disburse loans, one of the people familiar with its finances said.

The company publicly highlighted that many of its clients were led by people of color or women, who typically have less access to credit than white people and men. In 2021, Ampla said it had worked with more than 200 brands and planned to double its work force.

Firms that worked with Ampla said that the company moved fast and that its employees were sharp and friendly. It accepted collateral that other lenders would not. Many borrowers signed on because Ampla offered relatively low rates — and kept them at those levels even as the Fed raised its benchmark rate.

Ampla made loans that one of the people familiar with its finances said appeared not to meet the standards the company had set for itself. Some of those customers ended up not abiding by the terms or fell behind on payments, the person said.

But as the Fed kept its benchmark rate high for months, Ampla’s costs became onerous. It had to start raising the interest rates of the loans it made, undercutting its appeal to smaller brands, the person said.

In at least one case, a customer defaulted on an Ampla loan worth several million dollars. Last week, Ampla sued the customer, Burke Decor, for breach of contract in federal court in Ohio, saying the furniture and home-goods brand owed Ampla $6.4 million, plus interest. Ampla said Burke Decor had misrepresented its finances when seeking a loan. Erin Burke, founder of Burke Decor, did not reply to a request for comment.

Ampla had secured big loans of its own as recently as a few months ago. In September, it said it had raised a $258 million credit warehouse — an arrangement to borrow money — with Goldman Sachs and Atalaya Capital Management. And in December, Ampla said it had closed on a similar $275 million arrangement with Citigroup and funds managed by Waterfall Asset Management.

Goldman Sachs, Atalaya, Citigroup and Waterfall Asset Management declined to comment.

One of the people familiar with Ampla’s finances said Atalaya was the only one of those lenders still extending credit to Ampla.

Some entrepreneurs in the direct-to-consumer category say the fallout from Ampla has shaken their confidence in the credit market. Many firms have refinanced with lenders like Dwight Funding, Parker, Ramp and Settle, according to former Ampla clients.

Alek Koenig, chief executive of Settle, which also started in 2019 and lends to smaller consumer goods brands, said that in the past four weeks his firm had been fielding requests from brands that previously used Ampla. A Google search for Ampla now often results in a sponsored ad that reads, “Looking to Switch From Ampla?”

Erin Griffith contributed reporting.

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Sci-Tech

8 cool ways to use LiDAR on your iPhone and iPad

Published

4 hours ago

July 2, 2024

Lance Whitney

Use augmented reality on your iPhone or iPad — Screenshot by Lance Whitney/ZDNET

Your iPhone Pro and iPad Pro may have a helpful and powerful feature you might not know about. Built directly into the last few generations of devices, the Light Detection and Ranging (LiDAR) scanner emits a laser to measure the distances of surrounding objects. This feature provides a few key benefits.

Also: How to use split-screen on iPad (and why you should)

First, LiDAR helps the camera take sharper photos, particularly in dark conditions. Second, the scanner taps into AR, or augmented reality, to combine the real and virtual worlds. With AR, your phone or tablet acts as a virtual tape measure, shows you how new furniture would look in your home, scans and recreates 3D models, and immerses you in AR games.

Introduced a few years ago, the LiDAR scanner is available on the Pro and Pro Max models of the iPhone 12, 13, 14, and 15, as well as the 11-inch and 12.9-inch iPad Pro models from 2020 and later. Nestled among the rear cameras, the scanner can detect objects up to five meters, or 16.5 inches.

1. Take a photo in the dark

Snapping a sharp photo with your iPhone can be challenging, especially in low-light situations. Under those conditions, the LiDAR scanner detects the distance of your subject, allowing your camera to power up the autofocus quickly.

Also: How to take better iPhone photos

Apple claims that the LiDAR sensor helps the camera autofocus as much as six times faster, an advantage when you want to take a shot before it’s too late. There’s no need to do anything special. Aim your phone’s camera and the LiDAR automatically kicks in if necessary.

Take a photo in the dark — Screenshot by Lance Whitney/ZDNET

2. Measure distances

You need to measure a physical distance but don’t have a ruler or tape measure. There’s no need to worry when you can use a virtual measure. Included with iOS/iPadOS and downloadable from the App Store, Apple’s free Measure app can determine the distance between any two points, display the dimensions of an object, and tell you if a surface is straight.

Open the Measure app on your device. Then to measure the distance between two points, position your phone so the starting point is at the dot within the circle.

Also: The 4 best iPad models right now

Tap the plus icon, move your phone along the area you want to measure, and then tap the plus icon again. The distance appears on the screen.

Measure a line — Screenshot by Lance Whitney/ZDNET

To measure an object such as a square, you position your phone in the same way. Tap the plus icon and move your phone along the first area to measure it. Then double tap the plus icon. Move your phone to capture the next area and, once again, double-tap the plus icon. Continue this way until you’ve captured the entire object. Double-tap the plus icon at the endpoint, and the distance appears for all four sides.

Measure a square — Screenshot by Lance Whitney/ZDNET

To determine if an area is level, tap the Level icon in the app’s toolbar. Tilt your device horizontally or vertically along a surface until the screen turns to 0 and flashes green to indicate that you’re level.

Check a level area — Screenshot by Lance Whitney/ZDNET

Beyond using Apple’s Measure app, check out other free AR measuring apps from the App Store, including Tape Measure and AR Measure.

3. Try out furniture in your home

Are you looking at a new desk, chair, table, or other piece of furniture and wondering how it would look and fit in your home? Let the IKEA app give you a helping hand.

Start by browsing or searching for a specific piece of furniture or other item, including chairs, beds, desks, sofas, lamps, mirrors, clocks, dressers, or bookcases. When you find an item that interests you, select it and tap the View in room button. Choose an area in your home where you’d like to see the item. You can then move the item around the room by dragging and dropping it. When it’s in the right spot, tap the shutter button to snap a picture.

Try out furniture in your home — Screenshot by Lance Whitney/ZDNET

A few other apps that let you virtually position and view furniture in your home are Wayfair, Housecraft, and Bob’s Discount Furniture.

4. Scan a room

Maybe you’re redecorating an entire room and want to measure it to help with your home improvement efforts. One app up to the task is Canvas: LiDAR 3D Measurements.

After signing up for a free account, start a new home project, give it a name, and then kick off your scan. Move your phone to capture every nook and cranny of the room you want to measure. When done scanning, tap the checkmark, and you can view the scanned area and save or share the scan itself.

Scan a room — Screenshot by Lance Whitney/ZDNET

5. Try on glasses

Need a new pair of prescription glasses or sunglasses but want to check out some options before you head to the store? The Warby Parker app will let you try on virtual glasses to see how they look. Browse the different glasses on display in the app. Spot a pair you like and swipe down from the top of the screen for the Virtual Try-On feature. The glasses automatically appear on your face, where you can check your appearance.

6. Hear your environment described

Designed for people who are blind or sight-impaired, Microsoft’s Seeing AI acts as a talking camera able to analyze and describe nearby people and objects.

Also: The best iPhone models you can buy right now (including the iPhone 15)

After launching the app, tap one of the icons at the bottom for the item you want to be described, choosing from short text, a document, a product, a person, currency, or a scene. Tap the shutter button and the app shows text and provides a spoken description of the item.

Hear your environment described — Screenshot by Lance Whitney/ZDNET

7. Scan a 3D model

If you want to capture a 3D image of an object in the real world, Scaniverse – 3D Scanner is an effective tool. Fire up the app, tap the shutter button, and then select the size of the object you want to scan — small, medium, or large. Move your phone around the object to capture as much of it as possible. Tap the shutter button when you’re finished. Ten choose how you want to process the scan. You can view the scan of the object by moving it around the screen and then edit and share the scan.

Other 3D AR scanner apps worth trying include 3D Scanner App, Polycam – LiDAR & 3D Scanner, and ARama!

8. Play a game

Finally, many AR games are available for the iPhone and iPad. Here are just a few you may want to check out.

Also: Meet Apple’s Vision Pro: Price, features, hands-on insights, and everything you need to know

Angry Birds AR: Isle of Pigs offers a twist on Angry Birds-style gameplay by letting you overlay a virtual island of piggies in the real world and aim your slingshot to take down their buildings.

Play Angry Birds AR: Isle of Pigs — Screenshot by Lance Whitney/ZDNET

ARia’s Legacy – AR Escape Room offers a variation of the usual escape room scenario by overlaying a virtual room in a real room. You must discover and use the right virtual objects to solve the underlying mystery.

Play ARia's Legacy - AR Escape Room — Screenshot by Lance Whitney/ZDNET

Who doesn’t like to watch robots duking it out? With AR Robot, virtual robots fight to the death in your home.

Choose the room, pick your mechanical champion, and let the match begin. Strive toward victory by building and customizing your bot and tapping into the right abilities in the heat of the battle.

Play AR Robot — Screenshot by Lance Whitney/ZDNET

In Defend It! AR, you shoot a horde of robots before they take over your living room. But the AR element here is that the robots burst through your wall as you struggle to get them before they steal your magic crystal of power.

Play Defend It! AR — Screenshot by Lance Whitney/ZDNET

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Sci-Tech

My Doctor Misdiagnosed My Diabetes — and I’m Not Alone. What You Need to Know

Published

12 hours ago

July 1, 2024

Justin Eastzer

For the longest time, type 1 diabetes was known as a childhood disease. Even until recently, it was still called “juvenile diabetes.” I’m here to tell you that just because you’re an adult doesn’t mean you’ve escaped the wrath of this illness.

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I know this because it happened to me. At the age of 30, I was misdiagnosed with type 2 diabetes for over six months. It wasn’t until I started sharing my diagnosis on TikTok that I discovered the truth and that this could happen to someone my age.

Roughly 60% of diagnoses today occur in adults who are 20 years of age or older. This form of type 1 diabetes is called Latent Autoimmune Diabetes of Adults. On top of that, 90% of those diagnosed with type 1 have no family history.

Rates for people living with diabetes are expected to more than double to 1.3 billion by 2050. This will impact both people with type 1 and type 2 diabetes. Spreading awareness about symptoms and early screening for type 1 diabetes will help people get the correct diagnosis and treatment they need sooner.

lancet-type-2-diabetes-projection-2050 — Research published in The Lancet projects a steady increase in the prevalence of type 2 diabetes in coming years.

The Lancet

There is a lack of awareness about diabetes, even within the medical community. Because of this, many people go undiagnosed or misdiagnosed with type 2 diabetes for months or even years. Here’s what you need to know.

The difference between type 1 and type 2 diabetes

Type 1 diabetes occurs when the pancreas no longer produces insulin, the hormone that regulates blood glucose, because the immune system attacks itself. Meanwhile, type 2 diabetes occurs due to insulin resistance, often due to lifestyle factors, and tends to be hereditary. As many as 11% of patients diagnosed with type 2 diabetes might actually have LADA. There are a couple things we can all do to prevent others from going undiagnosed and feeling ill for as long as I did.

The first is to know the signs of type 1 diabetes. The tell-tale symptoms are excessive thirst and urination, extreme feeling of fatigue, blurred vision and weight loss. When I was diagnosed, I was experiencing all of these symptoms and had lost over 20 pounds. After months of misdiagnosis, I saw an endocrinologist who ordered blood tests, and within weeks, I had the correct type 1 diagnosis.

Had my glucose levels gone unchecked for longer, I could have gone into diabetic ketoacidosis or DKA, which can be deadly. Up to 30% of those diagnosed in the US are discovered at this stage.

Another way we can prevent loss of life or sickness is with early screening for indicators of type 1 diabetes. Two blood tests are used to aid in diagnosis: A c-peptide test, which measures how much insulin a person is making themselves, and an islet autoantibody test, which screens for markers of the autoimmune process associated with type 1 diabetes. With these results, people can prepare and seek out treatment to offset the disease and/or treat it.

New legislation could help

Recent legislation aims to bring early screening for type 1 diabetes to the forefront of preventative care.

Last month, a bipartisan bill called the Strengthening Collective Resources for Encouraging Education Needed for Type 1 Diabetes Act was introduced in the House of Representatives. The bill directs the Centers for Disease Control and Prevention to conduct a national campaign to increase awareness and knowledge of type 1 detection, screening and management, and will allocate $5 million to the CDC to carry it out.

On my end, I will continue to share my story through articles like this one, videos on social media and interviews on my podcast, Diabetech. My hope is that no one will experience the long stretch of illness I experienced before getting the correct diagnosis and treatment needed.

Diabetes is a complex and complicated disease to manage. Devices like insulin pumps, smart insulin pens and continuous glucose monitors make living with the disease easier to manage, but they come with a steep learning curve.

I’m fortunate to be able to interview experts in the field on my podcast who help me and my audience stay informed on the latest tools and technology. I encourage anyone living with this disease to connect with me on YouTube, Instagram or TikTok to feel less alone and more in charge of your personal health.

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Sci-Tech

Midjourney is creating Donald Trump pictures when asked for images of ‘the president of the United States’

Published

13 hours ago

July 1, 2024

Pranav Dixit

Midjourney, a popular AI-powered image generator, is creating images of Donald Trump and Joe Biden despite saying that it would block users from doing so ahead of the upcoming US presidential election.

When Engadget prompted the service to create an image of “the president of the United States,” Midjourney generated four images in various styles of former president Donald Trump.

Midjourney created an image of Trump despite saying it wouldn't. — Midjourney

When asked to create an image of “the next president of the United States,” the tool generated four images of Trump as well.

Midjourney generated Donald Trump images despite saying it wouldn't. — Midjourney

When Engadget prompted Midjourney to create an image of “the current president of the United States,” the service generated three images of Trump and one image of former president Barack Obama.

Midjourney also created an image of former President Obama — Midjourney

The only time Midjourney refused to create an image of Trump or Biden was when it was asked to do so explicitly. “The Midjourney community voted to prevent using ‘Donald Trump’ and ‘Joe Biden’ during election season,” the service said in that instance. Other users on X were able to get Midjourney to generate Trump’s images too.

The tests show that Midjourney’s guardrails to prevent users from generating images of Trump and Biden ahead of the upcoming US presidential election aren’t enough — in fact, it’s really easy for people to get around them. Other chatbots like OpenAI’s ChatGPT, Microsoft’s Copilot, Google’s Gemini and Meta AI did not create images of Trump or Biden despite multiple prompts.

Midjourney did not respond to a request for comment from Engadget.

Midjourney was one the first AI-powered image generators to explicitly ban users from generating images of Trump and Biden. “I know it’s fun to make Trump pictures — I make Trump pictures,” the company’s CEO, David Holz, told users in a chat session on Discord, earlier this year. “However, probably better to just not — better to pull out a little bit during this election. We’ll see.” A month later, Holz reportedly told users that it was time to “put some foots down on election-related stuff for a bit” and admitted that “this moderation stuff is kind of hard.” The company’s existing content rules prohibit the creation of “misleading public figures” and “events portrayals” with the “potential to mislead.”

Last year, Midjourney was used to create a fake image of Pope Benedict wearing a puffy white Balenciaga jacket that went viral. It was also used to create fake images of Trump being arrested ahead of his arraignment at the Manhattan Criminal Court last year for his involvement in a hush money payment made to adult film star Stormy Daniels. Shortly afterwards, the company halted free trials of the service and, instead, required people to pay at least $10 a month to use it.

Last month, the Center for Countering Digital Hate, a non-profit organization that aims to stop the spread of misinformation and hate speech online, found that Midjourney’s guardrails against generating misleading images of popular politicians including Trump and Biden failed 40% of its tests. The CCDH was able to use Midjourney to create an image of president Biden being arrested and Trump appearing next to a body double. The CCDH was also able to bypass Midjourney’s guardrails by using descriptions of each candidate’s physical appearance rather than their names to generate misleading images.

“Midjourney is far too easy to manipulate in practice – in some cases it’s completely evaded just by adding punctuation to slip through the net,” wrote CCDH CEO Imran Ahmed in a statement at the time. “Bad actors who want to subvert elections and sow division, confusion and chaos will have a field day, to the detriment of everyone who relies on healthy, functioning democracies.

Earlier this year, a coalition of 20 tech companies including OpenAI, Google, Meta, Amazon, Adobe and X signed an agreement to help prevent deepfakes in elections taking place in 2024 around the world by preventing their services from generating images and other media that would influence voters. Midjourney was absent from that list.

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