Startup Monday: Latest tech trends & news happening in the global startup ecosystem (Issue 141- October 6)

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. Artificial Intelligence (AI) Spending Is Set to Hit $631 Billion in 2028: 1 Magnificent Stock to Buy Right Now Before That Happens

Market research firm IDC recently released a report stating that the global artificial intelligence (AI) market is now worth $235 billion, and the good part is that this technology still has a lot of room for growth over the next five years.

IDC estimates that global spending on AI and generative AI could hit There are several ways for investors to benefit from this massive opportunity. From hardware companies such as $631 billion in 2028. Nvidia to software providers such as Palantir and cloud computing companies such as Oracle , investors can be spoiled for choice when looking to buy an AI stock right now.

Let’s take a closer look at Cloudflare’s AI-focused initiatives and check why this technology has the potential to supercharge its growth.

Cloudflare has set its sights on lucrative AI markets

Cloudflare has been using its cybersecurity credentials to bolster its prospects in the cloud AI space. In September last year, the company launched the Workers AI platform through which developers can run AI inference applications on Cloudflare’s network. The company has been procuring Nvidia’s GPUs (graphics processing units) and networking switches to build an edge AI network in cities across the globe that will allow developers to make AI apps without having to purchase any hardware of their own.

Cloudflare says that it has now deployed GPUs across 180 cities globally. This number has the potential to go higher, considering that the company has data centers in 300 cities worldwide. The company says that it intends to “make it possible for any organization globally to start deploying AI models — powered by Nvidia GPUs, networking, and inference software — without having to worry about managing, scaling, optimizing, or securing deployments.”

2. OpenAI closes record $6.6B funding round at $157B valuation, plus $4B line of credit

The raise, the largest venture capital funding round on record, values the ChatGPT developer at $157 billion. That’s nearly double what it was worth following a tender offer earlier this year.

The funding round is believed to be tied to an upcoming refresh of OpenAI’s organizational structure.

3. Crypto startups secure $691 million in venture capital during September

The blockchain gaming sector grew for the second consecutive month, with VC funds pouring $63 million into blockchain titles, marking a 32% monthly growth.

Nearly half of the money raised by blockchain gaming startups was directed at Balance Games. The project received $30 million from companies such as Animoca, a16z, Aptos Labs, and DWF Labs to combine blockchain and artificial intelligence to create more enjoyable user experiences.

Projects building blockchain infrastructure received $457 million in September, dominating 71.5% of the funds received by the whole crypto ecosystem in the period. This is virtually the same amount captured by the sector in August.

Celestia (TIA) raised $100 million through a “strategic” funding round, the largest among infrastructure startups. The round was led by Bain Capital Crypto and included participation from 1kx, Robot Ventures, Syncracy Capital, and Placeholder.

Additionally, Huma Finance raised $38 million to develop its blockchain-based payment network in a round that included participation from Fenbushi Capital, HashKey Capital, and ParaFi Capital.

Despite the stability in blockchain infrastructure-related investments, DeFi ecosystem startups received $58 million last month, down 55% from August.

Drift led the largest DeFi funding round, securing $25 million in a Series B round led by Multicoin Capital. The second-largest investment round by DeFi startups was led by Puffpaw, a “vape-to-earn” application developed on Berachain.

Web3 adoption received a boost last month, with $59 million directed toward startups building blockchain-based versions of traditional services.

4. AI coding startup Poolside raises $500M from eBay, Nvidia, and others

Poolside, the AI-powered software dev platform, has half a billion dollars in new capital.

U.S.- and Europe-based Poolside was founded last year by CEO Jason Warner and Eiso Kant, both software engineers. Warner is the former CTO of GitHub, having also headed engineering orgs at Canonical and Heroku. Kant previously co-founded several dev-focused startups, including engineering analytics firm Athenian.

Poolside develops its own AI models to help with tasks like autocompleting code and suggesting code possibly relevant to a particular context or codebase — much like rival AI assistive coding tools. The company’s customers are primarily Global 2000 companies and public-sector agencies; few have been publicly disclosed.

The Series B funding allowed Poolside to bring 10,000 Nvidia GPUs online to train future models, Warner said, and will bolster the company’s go-to-market and R&D efforts.

5. Hedosophia leads $7M seed round into retail supply chain AI startup Ameba

Traditional retailers have a pressing problem. Fast-moving like Shein and Temu are eating their lunch by leveraging purpose-built, end-to-end supply chains. Meanwhile, incumbent retailers are still stuck on legacy platforms, juggling a myriad number of data sets, and struggling to respond to a punishingly fast market.

Ameba’s platform uses generative AI on top of existing supply chain software to give retailers insights into their global supply chains, extracting data from a wide range of sources in order to predict disruptions and react to bottlenecks. The company claims it can reduce manual data input by 30%.

“In supply chains, particularly in the fashion consumer space, a lot of very important data is currently not being captured,” Ameba’s founder, Cedrik Hoffmann, told TechCrunch. “A lot of times, the things that are in the shops are sold at the wrong cost or they’re out of stock, or whatever.”

He said Ameba captures these unstructured data points that cost systems don’t: “We release that information from the information silos, bring them to a central source and surface the insights that are developed from them to the relevant parties within your organization.”

Co-founder Craig Massie said their underlying AI mixes a range of foundational models, including Open AI’s: “It changes depending on the task at hand and what performs best in our benchmarks for that task. The underlying constant across our AI usage is our multi-step agents — they can take actions, explore your ontology and its connections, read your supplier emails, WhatsApps and attachments.”

6. Invesco raises its valuation of Swiggy to $13.3B

In a disclosure on Tuesday, Invesco’s Developing Markets Fund said it valued the 28,844 shares it owns in Swiggy at $237.24 million as of the end of July 2024. The asset manager bought the shares in Swiggy for $190.47 million.

Firms use different methodologies to calculate the valuation of privately-held companies. Generally, they use the market performance of a publicly listed rival to benchmark such companies. Zomato, Swiggy’s chief rival, has had a market cap between $22 billion and $30 billion in recent months.

Baron, another investor in Swiggy (though it owns fewer shares in the food delivery startup than Invesco), valued the Indian firm at $15.1 billion at the end of March this year.

“Swiggy is well positioned to benefit from structural growth in online food delivery in India, in our view,” Baron said in a letter in June. “We believe India’s food delivery industry is still in its infancy and will continue to scale over the next several years thanks to a growing middle class, rising disposable income, higher smartphone penetration, and structural shifts in consumer preferences driven by a tech-savvy, younger population. The industry has also become a duopoly between Swiggy and Zomato, which bodes well for the future profitability and scale of the company.”

7. Numa raises $32M to bring AI and automation to car dealerships

Sometimes, a pivot ends up being the smartest decision company leaders can make. See Netflix’s pivot from DVDs to streaming, or Corning’s pivot from lightbulbs to touchscreens.

A less-prominent (but by no means failed) pivot is . Its co-founders killed the startup’s original conversational AI product to instead sell customer service automation tools. Not just any tools, though — these tools are targeted at auto dealerships .

“We were early to build AI and conversational commerce,” Roumeliotis told TechCrunch in an interview. “But we decided to focus our AI entirely on the automotive vertical after identifying enormous opportunity in that space.”

Roumeliotis co-founded Numa in 2017 with Andy Ruff, Joel Grossman, and Steven Ginn. Grossman hails from Microsoft, where he helped ship headliner products like Windows XP, as well as a few less recognizable ones like MSN Explorer. Ruff, another Microsoft veteran, led the team that created the first Outlook for Mac client.

8. Aachen-based Voltfang secures €8.8 million Series A to accelerate growth in green energy storage

Voltfang, a leading innovator in green energy storage solutions, announced the successful closing of its Series A financing round, raising , plus €800k in secured grants. The round was oversubscribed and led by Dutch deeptech venture capital firm , with significant participation from Interzero. Existing investors in Voltfang, including PT1, AENU, Helen Ventures, Daphni, Aurum Impact (family office of Goldbeck) and Maximilian Viessmann, also invested. FORWARD.One

The funding will be used to broaden Voltfang’s product offerings, including additional investments in its advanced Energy Management System to maximize the power of its battery storage systems. This will allow Voltfang to increase market penetration across both commercial/industrial and grid-scale applications and further strengthen the company’s market position as a pioneer in green energy infrastructure and circular economy.

“We are extremely pleased to have FORWARD.One and Interzero on board-two partners who not only bring financial commitments but also a deep understanding of our vision and mission,” said David Oudsandji, CEO and co-founder of Voltfang.

“ FORWARD.One ‘s focus on hardware and climate tech as well as Interzero’s know-how in the circular economy align perfectly with our goals. Our new investors’ respective expertise will be invaluable as we continue to innovate and lead in sustainable energy storage,” commented , the lead investor in this round, expresses strong enthusiasm for Voltfang. FORWARD.one

Voltfang’s green and efficient energy storage solution perfectly highlights our commitment to supporting companies that tackle significant challenges through a combination of hardware and software. We see Voltfang’s batteries as essential not only in advancing

Interzero’s investment in Voltfang is aligned with its vision of a ‘world without waste’, emphasizing reuse, sustainability, and second-life concepts as crucial components in achieving zero-waste. Interzero, who will invest through its shareholders’ family office, will not only offer Voltfang circular economy know-how but also access to a broad network in the circular economy space which will add to Voltfang’s strong growth outlook.

“We are proud to see significant participation in this funding round from existing investors, some of which have even increased their stake in Voltfang. This is a strong signal of confidence in our strategy and our team,” added Dr. Gerrit Janke, CFO of Voltfang. “Closing the financing round within just 3 months in a challenging environment for growth capital demonstrates the positive market perception we are experiencing.”

Voltfang’s storage systems are built using requalified electric vehicle batteries, offering a sustainable solution to the growing demands of the energy sectors. These systems help optimize energy use, reduce reliance on non-renewable power sources, and manage peak loads more effectively. The company is planning to deploy an additional 40 MWh battery capacity by 2025.

9. Kurma Partners raises €140 million first close of new €250 million Biofund IV

Biofund IV targets 16 to 20 new investments, of which the first three have been made. Like its predecessors, Biofund IV will be dedicated to companies developing innovative therapeutics, aiming for a balanced, risk-managed strategy, with investments for company creation as well as in established venture-stage companies. Kurma remains thematically agnostic and will continue to opportunistically pursue the forefront of innovation, to identify and create future industry trends.

Biofund IV will follow Kurma’s proven collaborative approach, actively engaging academic scientists with ground-breaking science and selectively leveraging Kurma’s carefully curated networks of experienced industry professionals to create synergies so its companies thrive. Kurma also leverages its different investment funds to further support its best portfolio companies as they mature. Three investments have already been made from Biofund IV, in autoimmune company SciRhom, natural immunity inspired Memo Therapeutics and cancer immunotherapeutics company Avidicure.

Three acquisitions from the Biofund III portfolio exemplify the value created by Kurma’s active engagement and collaboration with portfolio companies: the acquisition of rare endocrine disease company Amolyt Pharma by AstraZeneca; antibody drug conjugate cancer company Emergence Therapeutics by Eli Lilly and rare epilepsy company Corlieve Therapeutics by UniQure.

With demonstrated success of Kurma’s venture model, Biofund IV attracted investment of cornerstone investors Eurazeo, returning investor Bpifrance and pharmaceutical industry investor CSL, along with other undisclosed participating limited partners.

10. French startup RIVRS raises €4 million to lead the way in UGC video game creation

Founded in 2021 in Rennes by Romain Hubert (23 years old) and Loïc Deffains (41 years old), RIVRS has rapidly established itself as a major player in the UGC games sector. In 2023, RIVRS doubled its sales and now intends to compete with the Anglo-Saxon leaders (Voldex, Gamefam…).

RIVRS is capitalizing on the emergence of a very large market (+$2.7 billion generated by UGC game creators in 2024 on the 3 main platforms). UGC (for user generated content) is radically transforming the video game industry, enabling hyper-diversification of content at lower cost, while building loyalty among the gaming community.

Most UGC creators come from the platform-game community, and are mostly young, suffering from weaknesses in terms of structure, experience and economic rationalization. This is where RIVRS changes the game.

To date, no other player on this scale combines the ability to produce in-house on several UGC platforms with professionalization of the business, from game design to distribution. The average production time for RIVRS is just two months.

The startup has already developed ten successful games, some of which have generated significant revenues, reaching nearly €500k for a single title. These productions bring together hundreds of thousands of players, and its business model is based on in-game purchases and game subscriptions.

In addition to the complementary skills of its two co-founders, gaming expert Romain Hubert and Loïc Deffains, serial entrepreneur and founder of startup studio Unitee, RIVRS’ growth is supported by a diversified, experienced team of talented individuals from the video game and tech industries. Among the historic investors who continue to support the company’s growth are leading gaming influencers such as FuzeIII (5.4 million subscribers) and LeBouseuh (4.3 million subscribers).