Startup Monday: Latest tech trends & news happening in the global startup ecosystem (Issue 155- February 22)

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. AI startup Baseten raises $75 million following DeepSeek’s emergence

• Baseten, a startup that runs artificial intelligence models for clients on their cloud infrastructure, has raised $75 million in funding, the company said Wednesday.
• The startup, worth $825 million in a new funding round, saw revenue grow sixfold in the most recent fiscal year.
• Baseten relies on multiple clouds to help companies run AI models.

Baseten, a startup that runs artificial intelligence models for clients on their cloud infrastructure, has raised $75 million in funding, the company said Wednesday.

After companies finish training AI models on reams of data, they need to deploy those models somewhere at the inference stage, which is when models generate outputs in response to user queries. That’s when Baseten comes in.

“In this market, your №1 differentiation is how fast you can move. That is the core benefit for our customers,” co-founder and CEO Tuhin Srivastava said. “You can go to production without worrying about reliability, security and performance.”

Companies can manage the deployment of their models without Baseten, but securing enough Nvidia chips in the right geographical areas can prove difficult, co-founder Amir Haghighat told CNBC.

Cloud providers sometimes inform customers that some GPUs will be moved into maintenance mode and become unavailable within minutes. Baseten helps its clients handle those instances without interruptions, Srivastava said.

“There are a lot of people paying millions of dollars per quarter to OpenAI and Anthropic that are thinking, ‘How can I save money?’” he said. “And they’ve flocked.”

Baseten clients often see their inference costs fall 40% or more, while receiving better performance, in comparison with homegrown architectures, head of marketing Mike Bilodeau wrote in an email.

The startup’s revenue for the fiscal year that ended in January was six times more than it was in the prior year, Srivastava said, without providing a dollar figure.

Founded in 2019 and based in San Francisco, Baseten has about 60 employees. Existing investors IVP and Spark Capital led the new round, with others participating. More than 100 enterprises are customers, along with hundreds of smaller companies, such as Descript, Patreon and Writer.

“Having more money in somewhat of a weird economic environment, it does not hurt,” Srivastava said.

2. AI Startup Led by 21-Year-Old Thiel Fellow Lands $2 Billion Valuation

The startup, which investors valued at $250 million in September, raised $100 million in the deal, which was led by Felicis, with participation from General Catalyst, DST Global, Benchmark and Menlo Ventures. Previous investors include Peter Thiel, Jack Dorsey and Larry Summers.

Unlike many AI startups, Mercor is currently profitable, the company said. The startup expects to generate $1 million in profit and $7 million in revenue this month, Chief Executive Officer Brendan Foody told Bloomberg. Foody, 21, won a Thiel Fellowship last year — the Peter Thiel-backed program that provides grants to young entrepreneurs, provided they drop out of school.

At Mercor, “Revenue is expanding faster than we can grow the team,” Foody said, adding that he expects to expand the company’s headcount to 100 from 75 by the end of the year.

Founded in 2023, Mercor joins Rippling, HireVue Inc., ZipRecruiter Inc. and others in a crowded field of companies seeking to use AI to overhaul the hiring process. AI startups have raised money swiftly and at record levels — US startups raised nearly $100 billion last year alone — as venture capitalists jockey for early positions in a technology they expect will transform industries.

Foody says the networking opportunities and imprimatur from the Thiel Fellowship helped him and his co-founders build the company more quickly.

Foody said he didn’t go out to raise funds for the latest round. Rather, investors sought him out and agreed to Mercor’s terms quickly, with the funding round coming together in just two weeks.

3. AI startup Genspark raises $100 million to compete with Google, source says

The Palo Alto-based company currently has over 2 million monthly active users, and the round was led by a group of U.S. and Singapore-based investors, the source said.

The company raised a $60 million last June. Its CEO Eric Jing led Baidu’s AI-powered smartphone and smart speaker Xiaodu unit. ), opens new tab

Genspark is one of a number of startups attempting to uproot the search engine market dominated by Alphabet’s Google. AI-generated search results can offer a single answer with citations, a potential user experience improvement compared to Google’s link lists.

4. Saronic raises $600M to mass-produce autonomous warships

Investor Elad Gil led the round, with General Catalyst joining existing investors Andreessen Horowitz, 8VC, and Caffeinated Capital, among others.

5. Hightouch raises $80M on a $1.2B valuation for marketing tools powered by AI

The funding will be used to continue developing Hightouch’s technology, as well as for business development and hiring.

Tejas Manohar — the co-CEO of Hightouch, who co-founded the company with Kashish Gupta (co-CEO) and Josh Curl (CTO) — said that at Segment, where he and Curl were also colleagues, there was work to be done beyond building a way to use APIs to improve integrations. That was a key evolution, but it was one that took a page from how developers worked, and thus could be too technical to execute in practice due to the number of data sources an organization might use.

“Asking customers to get data into Segment was an onerous task,” Manohar recalled, not least because data from warehouses, where a lot of data ended up, was primarily used for analytics — not marketing — purposes.

Hightouch has focused on developing tools in two main areas.

6. Pre-seed firm Afore Capital has a fresh $185M fund and a new program to help founders discover ideas

Despite Afore’s early success, Banerji and Jain say that not all young startups need as much capital as the firm has been offering. On Thursday, Afore is unveiling its fourth $185 million fund and a new strategy, which the firm is calling pre-seed 2.0. The partners describe the refined investment approach with one word: flexibility.

“We can write a small check, we can write a bigger check, but the idea is, we want to help you get the business off the ground,” Banerji said.

For the founders who already know what they want to build, the firm will still consider investments up to $2 million. However, Afore also wants to take a bet on aspiring entrepreneurs who have yet to come up with a concrete startup idea. Those people may not need as much funding because, in many cases, they have yet to leave their jobs or are still university students.

Afore has launched an eight-week Founders-in-Residence (FIR) program for the founders still in their ideation stage. The firm claims that FIR is very different from an accelerator like YC. Each cohort consists of only five to eight founders who are given an opportunity to explore startup ideas. “The goal is to invent. The goal is to build. The goal is not to fundraise,” Jain said.

Unlike YC, which offers standard terms to each company, Afore tries to customize each investment for its FIR founders, depending on the startup’s needs.

7. Cherryrock Capital raises new $172M fund from all-star investors to back diverse founders

The firm launched in 2023 during what was a challenging period for fundraising in the venture industry. As a result, Brown-Philpot said it took about two years for the firm to close Fund I, she told the outlet. Fund I seeks to focus on companies at the Series A and B stages, with Brown-Philpot noting in her announcement blog post that there are few firms focused on leading later-staged investments for diverse founders.

Cherryrock did not immediately respond to our request for comment.

The fund’s thesis comes during a time when diversity initiatives, programs, and focuses are under political and legal fire.

8. Polestar Capital launches €500 million e-mobility & infrastructure fund to accelerate zero-emission logistics

The fund will extend loans to e-mobility and logistics projects, providing “ essential financing that is urgently required but difficult to obtain elsewhere “. With the launch of PCEIF, the total committed capital at Polestar Capital will grow towards €1 billion, reinforcing its position as a leading asset manager bridging the funding gap for impact.

Jan-Willem König , CEO of Polestar Capital, explains: “ The shift to zero-emission logistics is one of the biggest opportunities to accelerate decarbonization. We see a growing demand for financial solutions that help companies transition without compromising their business models. Through our various funds, we have already issued a record €490 million in impact loans in 2024 alone. With PCEIF, we are now expanding our impact to the zero-emission mobility sector, ensuring that businesses have the financial support needed to accelerate their transition .”

Founded in 2012 by Jan-Willem Konig, Polestar Capital is an impact investment firm focused on bridging the funding gap in the circular economy, renewable energy, and biodiversity transitions. The firm specialises in structuring private debt solutions that enable systemic impact while delivering financial returns.

According to Polestar, the mobility sector is the second-largest CO2 emitter after the industrial sector, making zero-emission logistics essential for meeting climate targets and ensuring business viability.

However, the transition requires substantial investments-over €120 billion in Europe by 2030 for charging infrastructure, electric vans, and trucks.

Despite the economic and environmental benefits, securing financing remains difficult. Banks are hesitant to provide long-term capital, and venture capital is often unsuitable for these capital-intensive projects. PCEIF addresses this by offering structured debt financing tailored to companies in North West Europe in the growth or transitioning phase, enabling them to scale effectively.

9. METYCLE raises €14 million to expand platform for global metal recycling

The round was led by 2150 with strong continuous investment from existing investors DFF Ventures, Market One Capital, Partech, and Project A.

“ Metal recycling is crucial for the transition to a carbon-neutral world. Recycling does not only ensure circularity of metals, but also helps to reduce carbon dioxide emissions by up 95% compared to primary metal production ,” says Rafael Suchan, Co-founder of METYCLE. “ Today, already more than one third of global metal production is based on recycled metals and METYCLE makes the global metal recycling industry more efficient and transparent with the help of state-of-the-art technology .”

Founded in 2022 by Sebastian Brenner and Rafael Suchan, METYCLE is a managed marketplace for secondary metals, connecting collectors with metal recyclers and smelters worldwide. The platform handles the entire trading process, including quality assurance, logistics, and payment processing.

The company will use the new funds to develop further its data, software, and AI backbone for the metal recycling industry. METYCLE will introduce technologies to the secondary metals industry transforming end-of-life metals from heterogeneous products into highly specified global commodities.

“ Our platform is revolutionizing how secondary metals are traded globally ,” added Sebastian Brenner , Co-founder of METYCLE. “ By rolling out METYCLE’s AI-based sorting and quality certification, we’re creating unprecedented transparency and trust in the metal recycling industry .”

10. Spore.Bio raises €22 million to deploy a new generation of AI-based microbiology testing

Paris-based , a DeepTech startup that developed a proprietary AI technology in microbiology testing, announced today it has secured a to transform quality control in manufacturing €22 million Series A funding round

The oversubscribed funding round was led by VC firm Singular, with participation from Point 72 Ventures, 1st Kind Ventures (Peugeot Family Office), Station F and Lord David Prior (ex Chair NHS); alongside continued support by existing investors including LocalGlobe, No Label Ventures, and Famille C (Clarins Family Office).

The new funding follows a €7.9 million pre-Seed round led by LocalGlobe in December 2023, bringing the total funding to date to €29.9 million.

Amine Raji , CEO and Co-founder of said: “ AI is nice for chatbots and LLMs, but some amazing, niche applications are paving the way of deep changes in certain industries, especially science-related industries. We are proud of being an example of it, while having developed in only one year our proprietary AI-based technology that manages to do what existing technologies couldn’t for two centuries. We will keep on fighting to pursue our one and only goal: make every consumer product safe all around the world using our technology .”

According to recent years have seen a sharp rise in product recalls and contamination incidents across the FMCG industry — +20% of recalls in 2024. These events potentially pose serious public health risks and cost companies “ billions in damages, regulatory fines, and lost consumer trust “ — with an average cost of recall reaching €9.5 million.

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