Startup Monday: Latest tech trends & news happening in the global startup ecosystem (Issue 137- August 17)

Welcome to Startup Monday, my weekly newsletter that recaps the week in the global startup ecosystem. To have this newsletter emailed to you, you can sign up here.

Top startup news to follow this week:

1. The Week’s 10 Biggest Funding Rounds: Cybersecurity Leads With Kiteworks’ Nearly Half-Billion-Dollar Deal

Want to keep track of the largest startup funding deals in 2024 with our curated list of $100 million-plus venture deals to U.S.-based companies? Check out The Crunchbase Megadeals Board.

This week definitely saw a slowdown in big rounds, with only three deals breaking the $100 million mark. However, healthcare and medical device makers did well. Perhaps announcements are slowing as summer is coming to a close, but the week certainly seemed to lack the big money of so many this year.

1. Kitework, $456M, cybersecurity: Investors seem to be digging cybersecurity yet again. A week after closed a Abnormal Security that valued the startup at $5.1 billion, secure content company Kiteworks raised a from $250 million Series D (which also participated in the Abnormal round) and $456 million round . The San Mateo, California-based company described the new round as “growth equity,” but also said it was a “partial liquidity event,” meaning some investors were able to cash out. While the company did not specify a valuation, it did state it was a minority investment, meaning its valuation is greater than $1 billion. Kiteworks’ platform allows customers to share sensitive data with other trusted parties via communication channels such as email and file sharing. In 2020 the company raised $120 million in a funding round led by . Founded in 1999, Kiteworks has raised Insight Partners . The company was formerly known as Accellion and suffered a major data breach in . Sixth Street Bregal Sagemount $592 million

4. Neptune Medical , $97M, medical device: Like we said, a good week for medical device makers as Neptune Medical raised big, too. The Burlingame, California-based medical device maker locked up a $97 million Series D. The company said and were significant participants in this round. Neptune Medical is focused on using robotics to combat gastrointestinal disease. Founded in 2016, this is the company’s first disclosed funding amount, . Sonder Capital per Crunchbase

5. Caresyntax , $80M, healthcare: We stay on healthcare, with Caresyntax’s $180 million raise through a series C extension and growth debt expansion round. The money breakdown is $80 million in equity and a $100 million growth debt facility from a variety of investors. The San Francisco-based startup has developed software and an AI platform for surgery — allowing for the use of data and applications to enhance surgical precision and patient safety. Founded in 2013, the company has raised nearly $388 million, . per Crunchbase

9. Sahara AI, $43M, artificial intelligence: Los Angeles-based Sahara AI, a decentralized AI network, raised a $43 million funding round led by venture capital investors , Binance Labs and . Founded in 2023, the company has raised $49 million, Pantera Capital . per Crunchbase

2. Jeff Bezos’ brother’s firm has launched a debut $100M VC fund called HIPstr

HighPost Capital, a private equity firm run by Mark Bezos, Jeff Bezos’ younger brother, and PE veteran David Moross, has launched a new venture capital arm called HIPstr. And with it, fresh capital to invest in startups.

The new entity just its first . HighPost Capital focuses on consumer companies and HIPstr aims to take advantage of dramatically lower startup valuations of the past couple of years, VC fund of $100 million . The fund has already invested in half a dozen early-stage startups, including Wild Common, a liquor company started by Kylie Jenner, and , a cremation services provider that raised a $10 million Series A round last month. Bloomberg reported

3. EliseAI lands $75M for chatbots that help property managers deal with renters

Elise AI is the brainchild of co-founder and CEO Minna Song, who met the company’s second co-founder, Tony Stoyanov, while the two were undergraduate students at Cambridge. After graduating, Song moved to New York City, where she took a job as an administrative assistant at a residential real estate firm.

At the firm, Song saw how inefficiencies in the rental and leasing industry — particularly inefficiencies around messaging current and prospective tenants — were contributing to management teams’ exhaustion and burnout, she says.

“Recognizing this challenge, Stoyanov and I began creating AI software to automate communication,” Song told TechCrunch, “and we founded EliseAI in 2017.”

Today, EliseAI employs an army of chatbots to text with, email and respond to calls from renters about things such as apartment tours, maintenance requests, lease renewals and delinquencies. Song says the chatbots are trained on renters’ questions and conversations — both people looking to lease apartments and current residents — and are designed to hand off requests to humans automatically where necessary.

4. Radical Ventures raises nearly $800mn to focus on AI

Early backer of artificial intelligence pioneers has raised largest fund of its kind

Radical Ventures, the venture capital firm that helped to launch pioneering artificial intelligence start-up Cohere, has raised nearly $800mn to create the largest fund of its kind for AI. The Toronto-based venture capital firm’s third institutional fund will focus exclusively on growth-stage start-ups, according to people familiar with the plans. It raised $550mn last year to invest in early stage companies and $350mn in 2019. Radical’s investors include former Google chief Eric Schmidt’s family office, Stanford professor Fei-Fei Li, a computer scientist who has been dubbed the “godmother of AI”, and former Google Brain executive Geoffrey Hinton, as well as a number of Canadian pension funds, such as CPP Investments. CPP Investments said in public filings this week that it had committed $75mn to the new fund, bringing its total commitments to Radical to $204mn. The capital raise comes as some investors have started to question the likely returns from the billions of dollars that have flowed into AI start-ups in the wake of ChatGPT’s launch nearly two years ago. “There is certainly a hype cycle in some parts of venture and AI,” said Jordan Jacobs, co-founder and managing director of Radical Ventures. “But I think there’s going to continue to be a lot of money.” He added: “There are some truly giant future companies that are now transitioning from early stage to growth and feel we have the expertise and relationships to invest.” Jacobs declined to comment on the latest fundraising. Radical was launched in 2017, making it one of the earliest focused on investing exclusively in AI. The firm has since backed a string of fledgling AI companies that have grown rapidly as the technology has boomed. It was the first investor in AI start-up Cohere, which has since grown to a valuation of $5.5bn. Other portfolio companies include Covariant, a robotics foundation model, and drug discovery company Genesis Therapeutics. Venture capitalists have piled into AI companies in the past two years, even as broader start-up fundraising has been rocked by high interest rates, competition scrutiny on acquisitions and a largely frozen market for initial public offerings. AI investments drove a 47 per cent increase in US venture funding to $55.6bn in the three months to June, according to PitchBook, the highest quarterly total in two years. Radical was launched by Jacobs and Tomi Poutanen, who studied machine learning alongside Hinton at the University of Toronto. They previously ran a start-up, Milq, and in 2016 created Layer 6, an AI company that was acquired by Canada’s TD Bank. The duo originally started Radical to back deep learning companies as angel investors. They then sold their company to invest in the technology full-time after the publication of “Attention Is All You Need”, a landmark AI research paper authored by a group of Google scientists, including Cohere co-founder and chief executive Aidan Gomez. “We believed after that paper that [AI] would cause a replacement cycle of software that would have an economic impact akin to an industrial revolution, and that it would also unlock science, which would be like a second industrial revolution,” said Jacobs. “Zero western investors were focused on it,” he added.

5. Precision surgery AI company Caresyntax banks $180M to accelerate growth and fuel M&A

The financing comprises $80 million of equity and up to $100 million of growth debt facility, the company announced Thursday.

The company, which launched 10 years ago, says it serves over 30,000 surgical professionals across more than 3,000 operating rooms worldwide. Its operations span the U.S., Europe, the Middle East and Africa (EMEA).

The company also claims that it leverages tech and AI to collect, integrate and analyze unique and comprehensive data, providing caregivers with real-time and long-term clinical decision support to boost hospital operational efficiency and drive better patient outcomes and profitability.

Caresyntax executives said the company will use the fresh capital to scale customer adoption of surgical software tools and for continued development of the company’s AI and edge-to-cloud applications. The funding also supports its M&A strategy. Following several U.S. surgical data and technology acquisitions last year, the company is looking to complete several deals in 2024, executives said.

6. Create Health Ventures Closes First Fund of $21 Million

The firm, with offices in Austin, Texas, and Chicago, says it invests in business-to-business (B2B) solutions that both payers and pharmaceutical companies can leverage to meet business goals ranging from enhanced patient engagement and a more effective care journey to recruitment and retention in clinical trials as the need for participants accelerates.

“We’ve heard firsthand from payers, providers and pharmaceutical companies that their business goals are to elevate the patient experience, facilitate better health outcomes and improve access to care for all, especially those with health disparities,” said Emma Cartmell, co-founder and managing partner of the firm, in a statement. She has 25 years of experience in healthcare as a Chief Operating Officer, Chief Revenue Officer, board member and VC investor, as well as an advisor to Morgan Stanley, UnitedHealthcare, the University of Texas at Austin Dell Medical School and the British Government.

The other co-founder is Amit Aysola, who has more than 20 years of experience in healthcare as a management consultant, operator, investment banker and VC investor, and is an advisor to the Michigan Biomedical Venture Fund and the Institute for Artificial Intelligence in Medicine at Northwestern University.

A key focus of Create Health Ventures is investing in payer-facing technologies, as payers are subsidizing or paying for provider-facing technologies to successfully execute on value-based models and improve member experiences.

7. Singaporean investment app Syfe pulls in $27M to hasten growth in Asia Pacific

Syfe was founded in 2017 and launched its app in July 2019, and has since amassed over 100,000 users across more than 40 countries as it focused on making it easy for retail investors to find and invest in products that are usually not available to them via banks or traditional investment platforms.

“Many people had tried traditional wealth managers, but the advice they were being given was always limited to the investment products that institution offered,” Syfe CEO and founder Dhruv Arora said. “Even if there were better products on the market, the wealth manager could not offer them. On top of that, the fees of the traditional wealth managers are very high.”

8. Balderton Capital Pulls In $1.3 Billion for EU Tech Firms

“More people than ever are starting businesses — and those that do have global ambitions,” he wrote. “They are determined to build companies like Spotify or Revolut instead of smaller regional leaders.”

The trend is also reflected in European venture investment numbers as well, Liautaud added. In 2008, venture investments in European startups came to under $8 billion, compared to more than $50 billion last year.

“And the returns speak for themselves, with European VC funds outperforming North American funds over both a 10 and 15 year period,” he wrote.

“You can imagine how much that propels the fund,” Liautaud told the news outlet. “To have a great track record is one where you have consistent performance and sometimes you have an outsized return.”

The FT report further notes that Balderton, unlike other VC firms based in Europe, only backs European startups, meaning the company has missed out on many of the high-profile artificial intelligence (AI) startups based in Silicon Valley.

As covered here last month, AI projects have helped venture funding in the U.S. reach its highest quarterly total in two years, climbing to $55.6 billion during the second quarter of 2024. That’s up 47% from the $37.8 billion startups in the U.S. took in during the first quarter, fueled largely by in AI firms like Elon Musk’s major investments .

At the same time, there’s also been some indication recently that investors have become pickier about AI projects, with a Financial Times report in June showing that most of the stocks that surged during last year’s AI hype have dropped.

“AI is still a big theme, but if you can’t demonstrate evidence, you’re getting hurt,” said Stuart Kaiser, Citi’s head of equity trading. “Just saying ‘AI’ 15 times is not going to cut it anymore.”

9. London-based health tech Hexarad secures €13 million for its teleradiology platform

Hexarad is a high-growth health technology company with consistent annual revenue growth of over 120%. Its proprietary software and teleradiology platform helps customers across the UK, Ireland, and Saudi Arabia to boost radiology capacity and address the key causes of diagnostic delays.

Farzana Rahman, Co-Founder and CEO at Hexarad commented: “The clinical experience within our senior leadership team means that we understand these issues inside out and know how to create the most effective solutions. Importantly, as clinicians we also know to always put the patient first. This significant investment will allow Hexarad to continue its international growth and cement our place as one of the UK’s most exciting health technology companies.”

Hexarad’s software suite covers an end-to-end radiology workflow including a proprietary radiology information system (RIS), Hexarad Edge integration engine, Hexarad Hub for urgent reporting and Hexarad Portal for auto-allocation. The company recently won a Health Services Journal (HSJ) Partnership award for its work in reducing diagnostic waiting times for acute and emergency care patients at North West Anglia NHS Foundation, where it saved 14 hours of accident and emergency (A&E) referral time a night.

Hexarad also provides tech-enabled teleradiology services to the NHS and imaging centres across the UK and Ireland. The company has developed proprietary technology to automatically assign scans to the most appropriate radiologist. The auto-allocation tool assigns scans 90% more quickly than manual allocation, as well as being more accurate and more efficient. Hexarad has now established a strong community for radiologists, attracting over 200 radiologists to its platform to date, and delivers industry-leading turnaround times and consistently high customer satisfaction scores.

10. Danish VC Nine Realms lands €50 million from EIF to decarbonise the supply chain sector

The European Investment Fund (EIF) has signed a €50 million participation in Danish VC Nine Realms ‘ latest fund, focusing on supporting early-stage technology-enabled SMEs in the supply chain sector. The main goal of the investment is to support companies with strong ideas to improve the environmental footprint of the global supply chain, which can account for up to . 90% of a consumer good’s footprint

The fund has a target size of €200 million and will specifically target supply chain and transportation technology, industrial decarbonisation & environmental sustainability, and the Blue Economy for its investments. Nine Realms will mainly focus on the EU; at least 70% of the investments is destined for EU countries. The fund will have a particular focus on Germany, already a key market for the fund manager, where it will also open a local office.

“We are thrilled that the European Investment Fund recognises the immense potential at the intersection of supply chain and sustainability,” added Sune Stilling, Managing Partner at Nine Realms VC. “Their investment in Nine Realms Fund I validates our vision to support transformative technologies that not only optimise efficiency and resiliency, but also drive significant environmental impact. With our deep expertise in both Supply Chain and Venture Capital, we are uniquely positioned to identify and nurture the next generation of game-changers in this €7 trillion market. Together, we’ll build a more resilient, efficient, and sustainable future for global supply chains.”

Nine Realms is set to address one of the existing funding gaps in the early-stage segment of the supply chain technology sector in Europe, as well as a maturity gap between the European and American ecosystems. Europe currently accounts for only 5% of logistics venture funding worldwide, while representing 13% of overall venture funding, and despite having more than 50% of large logistics companies headquartered in Europe.

“Supply chains are an underestimated part of our climate puzzle, “ added EIF Chief Executive Marjut Falkstedt. “ In terms of both its carbon footprint and the optimisation of logistics for perishable goods, there is a lot to gain in this sector. We’re glad that Nine Realms takes on the challenge and are happy to support this as an integral part of our climate financing.”

Originally published at https://www.linkedin.com.