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In 2020, Big Tech reckoned with racial injustice. Its work is far from over.

From Facebook's walkouts to Amazon's facial recognition moratorium, did any of it make a difference?

In 2020, Big Tech reckoned with racial injustice. Its work is far from over.

Racial injustice issues engulfed the U.S. this year, and Big Tech wasn't spared.

Photo: Mark Makela/Getty Images

The movement for Black lives marched straight into the heart of some of Silicon Valley's most powerful companies this summer, with Facebook employees staging a virtual walkout over the company's policies, Pinterest employees speaking out about racism and retaliation they experienced and a parade of tech giants making heartfelt commitments to diversity and supporting POC-focused causes.

But as the year comes to a close, one of those giants, Google, is facing an uproar over the firing of Timnit Gebru, one of its top AI ethicists, after she wrote an internal message to fellow Googlers that criticized biases within the company and within its AI technology. It's a scandal Gebru's supporters argue is emblematic of the costs Black people in the tech industry bear for speaking out on issues related to discrimination every day.

So, the natural question to ask is: Did the summer's promises really have any impact on the tech companies who made them? According to some activists, the answer is yes. But there's so much more work to be done.

"What I'm seeing from my purview as a racial justice organizer, especially in the summer, was this transformative moment where corporations, including tech corporations, showed up and expressed values in ways that they never have before in support of the broader movement for Black lives," said Arisha Hatch, chief of campaigns at the advocacy group Color of Change, which focused part of its activism on the tech industry. "The accountability work moving forward is actually pushing them to do tangible things that match up with their broader values."

Hatch said she saw some of those "tangible things" start to materialize this year. For one thing, companies like Facebook and Twitter made measurable commitments to hiring underrepresented minorities, including in executive positions. "Six years ago they were saying it was illegal for them to make those sorts of commitments," Hatch said.

Facebook also promised to set up an internal civil rights infrastructure, following the recommendations laid out in a civil rights audit that Color of Change and others had fought for for years. Hatch called that commitment "the highlight of the year" in terms of progress in tech.

There were some other meaningful advances, too, according to Malkia Devich-Cyril, senior fellow and founding director of MediaJustice: "We saw the movement for Black lives have an incredible impact on the tech industry in the facial recognition debate."

As protests against police brutality swept the country, Amazon said it would stop selling its Rekognition technology to police for one year, Microsoft said it wouldn't sell facial recognition tech to police until there was a federal privacy policy and IBM said it was getting out of the facial recognition business altogether.

Though skeptical that these companies made the decisions out of the goodness of their hearts, Devich-Cyril said the impact is still real: "It was because of the fight and the language of 'defund the police' that those companies even went that far and said: Let's have this moratorium while we figure this out."

Still, Devich-Cyril said they'd like to see tech companies go a lot further in terms of breaking their ties with police, which extend well beyond facial recognition into predictive policing and risk assessment algorithms. "At every stage of the policing system, of the carceral system, we now have technology," they said. "The movement for Black lives has taken this on."

Even as corporate executives have made promises, however hollow, minority tech workers were also emboldened to speak out this year more than they have been in the past, Ifeoma Ozoma said. She, along with her former colleague Aerica Shimizu Banks, described the discrimination she faced at Pinterest on Twitter. That opened the door for other tech workers to share their own stories, too. "A lot of people said that because of the clarity of [our] statement … they felt like they could say more," Ozoma said. "For a long time, they felt like you can't say what happened or who did it or how it happened."

Twitter lit up this summer with the stories of how Black tech workers and startup founders are treated in the industry. "Where I think there's been progress is in folks understanding their ability to organize and blow the whistle," Ozoma said.

But the progress ends there: Whistleblowers, Ozoma said, still face the brunt of the consequences for the problems they call out inside tech companies, an experience she's felt firsthand. "People don't understand the toll that speaking up takes, that enduring any of this takes," Ozoma said.

Google CEO Sundar Pichai has said the company will investigate Gebru's firing, writing in a letter to staff, "We need to accept responsibility for the fact that a prominent Black, female leader with immense talent left Google unhappily. This loss has had a ripple effect through some of our least represented communities, who saw themselves and some of their experiences reflected in Dr. Gebru's."

But for now, it's Gebru who's the one without a job. While Ozoma and Gebru have received plenty of verbal support for their actions, Ozoma said options for whistleblowers are far more limited than many of those supporters understand. "People say, 'Go start your own business.' With what fucking capital?" Ozoma said. "There's an immediate financial toll ... There's a career toll even though people say, 'Anybody would be lucky to have you.'"

Ozoma is now working on a project with the Omidyar Network to provide resources to whistleblowers. She said it's time for tech companies to stop making promises that they end up breaking and to start facing repercussions from the market. She's hopeful that some of that's beginning to happen, as evidenced by a shareholder lawsuit recently filed against Pinterest in response to the allegations she and Shimizu Banks made. "I don't believe in commitments," Ozoma said. "I believe in consequences."

Image: Yuanxin

Yuanxin Technology doesn't hide its ambition. In the first line of its prospectus, the company says its mission is to be the "first choice for patients' healthcare and medication needs in China." But the road to winning the crowded China health tech race is a long one for this Tencent- and Sequoia-backed startup, even with a recent valuation of $4 billion, according to Chinese publication Lieyunwang. Here's everything you need to know about Yuanxin Technology's forthcoming IPO on the Hong Kong Stock Exchange.

What does Yuanxin do?

There are many ways startups can crack open the health care market in China, and Yuanxin has focused on one: prescription drugs. According to its prospectus, sales of prescription drugs outside hospitals account for only 23% of the total healthcare market in China, whereas that number is 70.2% in the United States.

Yuanxin started with physical stores. Since 2015, it has opened 217 pharmacies immediately outside Chinese hospitals. "A pharmacy has to be on the main road where a patient exits the hospital. It needs to be highly accessible," Yuanxin founder He Tao told Chinese media in August. Then, patients are encouraged to refill their prescriptions on Yuanxin's online platforms and to follow up with telehealth services instead of returning to a hospital.

From there, Yuanxin has built a large product portfolio that offers online doctor visits, pharmacies and private insurance plans. It also works with enterprise clients, designing office automation and prescription management systems for hospitals and selling digital ads for big pharma.

Yuanxin's Financials

Yuanxin's annual revenues have been steadily growing from $127 million in 2018 to $365 million in 2019 and $561 million in 2020. In each of those three years, over 97% of revenue came from "out-of-hospital comprehensive patient services," which include the company's physical pharmacies and telehealth services. More specifically, approximately 83% of its retail sales derived from prescription drugs.

But the company hasn't made a profit. Yuanxin's annual losses grew from $17 million in 2018 to $26 million in 2019 and $48 million in 2020. The losses are moderate considering the ever-growing revenues, but cast doubt on whether the company can become profitable any time soon. Apart from the cost of drug supplies, the biggest spend is marketing and sales.

What's next for Yuanxin

There are still abundant opportunities in the prescription drug market. In 2020, China's National Medical Products Administration started to explore lifting the ban on selling prescription drugs online. Although it's unclear when the change will take place, it looks like more purely-online platforms will be able to write prescriptions in the future. With its established market presence, Yuanxin is likely one of the players that can benefit greatly from such a policy change.

The enterprise and health insurance businesses of Yuanxin are still fairly small (accounting for less than 3% of annual revenue), but this is where the company sees an opportunity for future growth. Yuanxin is particularly hoping to power its growth with data and artificial intelligence. It boasts a database of 14 million prescriptions accumulated over years, and the company says the data can be used in many ways: designing private insurance plans, training doctors and offering chronic disease management services. The company says it currently employs 509 people on its R&D team, including 437 software engineers and 22 data engineers and scientists.

What Could Go Wrong?

The COVID-19 pandemic has helped sell the story of digital health care, but Yuanxin isn't the only company benefiting from this opportunity. 2020 has seen a slew of Chinese health tech companies rise. They either completed their IPO process before Yuanxin (like JD, Alibaba and Ping An's healthcare subsidiaries) or are close to it (WeDoctor and DXY). In this crowded sector, Yuanxin faces competition from both companies with Big Tech parent companies behind them and startups that have their own specialized advantages.

Like each of its competitors, Yuanxin needs to be careful with how it processes patient data — some of the most sensitive personal data online. Recent Chinese legislation around personal data has made it clear that it will be increasingly difficult to monetize user data. In the prospectus, Yuanxin elaborately explained how it anonymizes data and prevents data from being leaked or hacked, but it also admitted that it cannot foresee what future policies will be introduced.

Who Gets Rich

  • Yuanxin's founder and CEO He Tao and SVP He Weizhuang own 29.82% of the company's shares through a jointly controlled company. (It's unclear whether He Tao and He Weizhuang are related.)
  • Tencent owns 19.55% of the shares.
  • Sequoia owns 16.21% of the shares.
  • Other major investors include Qiming, Starquest Capital and Kunling, which respectively own 7.12%, 6.51% and 5.32% of the shares.

What People Are Saying

  • "The demands of patients, hospitals, insurance companies, pharmacies and pharmaceutical companies are all different. How to meet each individual demand and find a core profit model is the key to Yuanxin Technology's future growth." — Xu Yuchen, insurance industry analyst and member of China Association of Actuaries, in Chinese publication Lanjinger.
  • "The window of opportunity caused by the pandemic, as well as the high valuations of those companies that have gone public, brings hope to other medical services companies…[But] the window of opportunity is closing and the potential of Internet healthcare is yet to be explored with new ideas. Therefore, traditional, asset-heavy healthcare companies need to take this opportunity and go public as soon as possible." —Wang Hang, founder and CEO of online healthcare platform Haodf, in state media China.com.

Zeyi Yang
Zeyi Yang is a reporter with Protocol | China. Previously, he worked as a reporting fellow for the digital magazine Rest of World, covering the intersection of technology and culture in China and neighboring countries. He has also contributed to the South China Morning Post, Nikkei Asia, Columbia Journalism Review, among other publications. In his spare time, Zeyi co-founded a Mandarin podcast that tells LGBTQ stories in China. He has been playing Pokemon for 14 years and has a weird favorite pick.

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