Tech
New Mexico just handed Meta its first courtroom defeat over child safety, and the rest of the country is watching
A jury in Santa Fe on Tuesday ordered Meta to pay $375 million in civil penalties after finding the company misled consumers about the safety of its platforms and endangered children.
New Mexico attorney general Raúl Torrez’s office called the decision a “watershed moment for every parent concerned about what could happen to their kids when they go online,” according to a press release issued right after the ruling.
The verdict, reached after a six-week trial, found Meta liable on both claims brought by the state under its Unfair Practices Act. At $5,000 per violation — the maximum allowed under the law — the penalty may seem paltry for a company valued at $1.5 trillion by public market investors. But the dollar amount isn’t as important as the fact that this is the first jury verdict of its kind against Meta over harm to young people.
“Meta executives knew their products harmed children, disregarded warnings from their own employees, and lied to the public about what they knew,” Torrez said in a statement following the verdict. “Today the jury joined families, educators, and child safety experts in saying enough is enough.”
New Mexico’s case against the company grew out of a 2023 undercover investigation in which state investigators created decoy accounts on Facebook and Instagram posing as users younger than 14. Those accounts were sent sexually explicit material and solicited for sex by several New Mexico men who were arrested in May 2024. Two were apprehended at a motel where they believed they’d be meeting a 12-year-old girl, based on conversations they had with the accounts.
The operation formed the basis of the state’s case. The evidence it produced — along with internal Meta documents and testimony from former employees — showed that company staff and outside child safety experts repeatedly raised alarms about dangers on the platforms and were largely ignored.
Some of the most damaging testimony came from people who worked inside the company.
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Arturo Béjar, who spent six years as an engineering and product leader at Meta beginning in 2009, told the court (after testifying before the Senate years earlier) about his efforts to warn Meta executives after his own 14-year-old daughter received unwanted sexual advances on Instagram. He also testified that the same personalized algorithms that make Meta’s platforms effective at targeting ads could be equally useful to predators.
“The product is very good at connecting people with interests,” Béjar said, “and if your interest is little girls, it will be really good at connecting you with little girls.”
Brian Boland, a former vice president of partnerships product marketing at Meta who spent nearly a dozen years with the company, testified that when he left the outfit in 2020, he “absolutely did not believe that safety was a priority” to CEO Mark Zuckerberg and then-COO Sheryl Sandberg.
Zuckerberg was deposed as part of the case, and a recording of that deposition, which was taken a year ago but shown to jurors earlier this month, offered some of the trial’s more memorable moments. Zuckerberg described research on whether the platforms are addictive as “inconclusive,” a characterization that the state pushed back on, noting Meta’s own researchers found that several product features were designed to produce dopamine responses and increase time spent on the apps.
When asked whether he, as a parent, had a right to know if a product his own child was using was addictive, Zuckerberg said there was a lot to “unpack in that.” He then noted that he and his wife personally look into whether products are “good to use” before giving them to their children, and that they “also oversee how they’re used.” His children, he noted, are “younger.”
Unsurprisingly, Meta said it plans to appeal. “We respectfully disagree with the verdict,” a spokesperson said to media outlets, adding that the company “works hard to keep people safe” on its platforms.
The New Mexico case is far from Meta’s only legal headache. Meta and YouTube are also embroiled in a trial in Los Angeles over claims that their platforms are addictive and have harmed young users.
That second verdict could come soon. A jury is deliberating in the case, which was brought by a plaintiff known only as K.G.M., a 20-year-old California woman who claims she became addicted to social media as a child and that she suffered anxiety, depression, and body-image issues as a result. (TikTok and Snap were also defendants and settled before trial.)
On Monday, the judge overseeing the Los Angeles case told jurors to keep deliberating after the panel indicated it was having trouble reaching a verdict on one of the defendants — raising the possibility of at least a partial retrial.
Meanwhile, a second phase of the New Mexico case — a bench trial (meaning there is no jury) on public nuisance claims scheduled to begin May 4 — could result in more penalties, along with court-mandated changes to Meta’s platforms, including age verification requirements and new protections for minors.
Rather than arguing that Meta broke a specific consumer protection law, the state is arguing that the company’s platforms have broadly harmed the health and safety of New Mexico residents.
Tech
Doss raises $55M for AI inventory management that plugs into ERP
Enterprise resource planning (ERP) systems are often described as a company’s “central brain” because the software connects different departments — including finance, HR, and inventory — into a single database where everyone shares the same information.
In recent years, a new crop of AI-powered ERP startups, such as Rillet and Campfire, has emerged hoping to replace legacy offerings like NetSuite. These companies claim that traditional ERPs are clunky, expensive, and time-consuming to implement.
However, according to Doss co-founder and CEO Wiley Jones, many new AI ERPs lack robust inventory management, the process of ensuring that the data on physical goods remains synced with the accounting ledger.
Doss claims to solve this by providing an AI-native inventory management layer that integrates with existing accounting systems, whether traditional ERPs or ones built by AI-based startups.
On Tuesday, Doss announced that it raised a $55 million Series B co-led by Madrona and Premji Invest, with participation from Intuit Ventures. Other new and existing inventors in the round include Theory Ventures, General Catalyst, Contrary Capital, and Greyhound Capital.
Doss, founded in 2022, originally focused on a core accounting product similar to those offered by AI-native startups like Rillet and Campfire. But last year, the startup decided instead of competing with these companies, “we would rather partner with them, and play a different game,” Jones told TechCrunch.
Jones explained that AI-native ERP companies manage accounts receivable, accounts payable, and other finance functions, but most don’t offer procurement and inventory management that integrates with accounting workflows.
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“We’re building a lot of the traceability for the supply chain, but through the lens of plugging into a finance and accounting partner,” Jones said.
The company’s main partners include Rillet and Campfire. Many clients also use Doss in conjuction with Intuit’s QuickBooks.
“The reason that they work with us is that [physical goods management] is not something that they’re likely going to build as a core competency without putting in a lot of energy and effort,” Jones said.
Doss’ core customer base consists of mid-market consumer brands, typically generating between $20 million and $250 million in top-line revenue. One such customer is Verve Coffee Roasters, a high-end specialty coffee brand.
The startup sees itself as competing with traditional ERPs. But these players are not sitting ideal in the age of AI, either. NetSuite, for instance, has recently introduced its updated AI ERP. It also competes with other agentic procurement startups such as Didero.
While Jones admits that selling two ERP systems, one for accounting and another for inventory management like Doss, “is a hard sell,” he says that legacy ERPs are so hard to implement that many customers are choosing to have two newer, AI-powered systems.
“I think it’s going to be a very intense fight inside of mid-market that ultimately will be determined by whoever rebuilds their architecture to be most legible and usable for agents,” Jones said.
Editor’s Note: The story corrected the list of Doss’ partners.
Tech
Crunchyroll confirms data breach after hacker claims unauthorized access
Anime streaming service Crunchyroll has confirmed a data breach involving customer service ticket information following an incident with a third-party vendor, after a hacker claimed to have accessed user data and internal systems.
The streaming site, which Sony acquired from AT&T in 2020 for $1.18 billion, operates as a joint venture between U.S.-based Sony Pictures Entertainment and Japan-based Aniplex. Crunchyroll has more than 2,000 titles in over 12 languages and serves 15 million subscribers worldwide, per its website.
Reports of a threat actor claiming access to Crunchyroll user data surfaced online this week, with a hacker alleging that they obtained data about millions of users.
Crunchyroll said it is investigating the claims.
“Our investigation is ongoing, and we continue to work with leading cybersecurity experts,” the company said in a statement to TechCrunch, adding that it has not identified evidence of ongoing unauthorized access.
Separately, materials shared with TechCrunch by a cybersecurity-focused account, International Cyber Digest, indicate the attacker may have gained access to Crunchyroll’s Zendesk support system. Screenshots we have seen appear to show the company’s internal Slack messages and stolen support data, apparently stolen by hacking an employee at Telus Digital, an outsourcing giant that handles customer support for Crunchyroll. The hacker allegedly stole customer support ticket data until early 2025, at which point their access was revoked.
The cybersecurity account said the hack was separate from a recent breach affecting Telus Digital, which the company confirmed last week.
Crunchyroll did not respond to a follow-up question about whether the third-party vendor relates to its support partner, Telus Digital.
Telus Digital did not respond to requests for comments.
The hacker told BleepingComputer they had downloaded about eight million support ticket records from Crunchyroll’s systems, including roughly 6.8 million unique email addresses, though the claims have not been independently verified. The hacker also told the publication they gained access on March 12 after compromising an Okta single sign-on account belonging to a Crunchyroll support agent.
Tech
BKR Capital raises $14.5M (so far) to invest in Black founders
Canada’s BKR Capital announced Monday that its Fund II has closed CA$20 million (around $14.5 million), bringing it closer to its CA$50 million target.
This fund is looking to back “high-growth technology companies led by founders from the Black community, building solutions for the future of work, living, and global connectivity,” managing partner Lise Birikundavyi told TechCrunch. The firm is mainly looking at Canada but is open to backing select companies globally. The average check size will be between $250,000 and $1.5 million, she said.
Birikundavyi said that almost 70% of the Black population in Canada is first- or second-generation immigrants, “resulting in founders who build globally from day one, unlocking early access to international markets and creating a structural advantage in scaling.”
Though many U.S. firms have shied away from openly advertising a mission that could be perceived as diversity, equity, and inclusion (DEI), Birikundavyi said her Toronto-based fund doesn’t share those exact fears. What’s happening in Canada is less of a DEI rollback and more of a reframing, she said, where investors are “prioritizing discussion on performance,” even though “the underlying opportunity remains unchanged.”
She added, “Expanding access to overlooked founders continues to surface high-quality deals, making this less about DEI and more about arbitrage investing.” She believes investors in Canada still see “inclusive investment” as good for the ecosystem and full of potentially lucrative business opportunities.
The firm’s thesis is rooted in the belief that “overlooked markets and diverse lived experiences can unlock outsized venture opportunities,” Birikundavyi said. The firm launched in 2021 and raised $22 million for its Fund I (which Birikundavyi said is performing better than at least 75% of the other funds launched around the same time). She said BKR Capital hopes to make its final close for Fund II in December and invest in 25 companies.
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