Startup Monday: Latest tech trends & news happening in the global startup ecosystem (Issue 157- March 15)

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. Y Combinator founders raising less money signals a ‘vibe shift,’ VC says

Silicon Valley has been captivated by the prospect of AI, not only as a productivity enhancer but also as a catalyst for creating successful companies with much leaner teams than in the past.

Terrence Rohan, an investor with Otherwise Fund who’s been investing in Y Combinator since 2010, says he’s noticing a “vibe shift” from some founders in the current batch of the famed accelerator.

This founder wasn’t just saying this because of lack of VC interest. The round was oversubscribed, Rohan said, meaning lots of VCs wanted in.

“Smart founder” was the reaction of Alexis Ohanian, the founder of VC firm Seven Seven Six and co-founder of Reddit.

Less funding, big mistake?

While building a good product with a small engineering team may be possible, Conrad points out that having more funding can accelerate company growth.

Rohan told TechCrunch that Conrad’s point is a classic one, but he thinks the “game on the field is changing.”

“Folks are getting to substantial revenue quicker and with fewer people, and it’s a belief that maybe they can sustain that revenue with fewer people,” Rohan said.

It’s too early in the AI market to say if Rohan and the upstart founders are right. The initial examples suggest that fast-growth AI companies are still raising as much as they can.

In the meantime, Anysphere’s headcount grew to 90 people and ElevenLabs’ to 200, according to data provided by PitchBook.

Other AI startups are securing funding at a rapid pace, too, demonstrating that startups are still eager to accumulate capital even if they are maintaining a relatively low staff size.

“VCs are very charming and persuasive, and they’re throwing money,” said Rohan, adding that these companies are likely obtaining funding with low dilution, meaning they aren’t giving up significant ownership.

But YC founders are now much more aware of the pros and cons of venture capital, he said.

Many startups that secured funding at inflated valuations in 2020 and 2021 were later forced to raise capital at significantly lower valuations, known as a down round.

Perhaps more importantly, raising a lot of venture capital from elite VC firms is no longer the goal for some YC founders.

“It’s just a different tone and conversation versus, ‘I want to raise this round, and then I want to have Sequoia and Benchmark lead my Series A,’” Rohan said.

2. US agrifoodtech funding up 14% driven by investment in AI-related startups

After a few tough years of macroeconomic turbulence marked by stubborn inflation, costly credit, and ongoing trade uncertainties, the US agrifoodtech investment scene showed cautious signs of recovery in 2024-with artificial intelligence emerging as a key catalyst.

But, given US venture capital trends are often a precursor to those elsewhere, the uptick in US investment in 2024 could signal a stabilization point for the sector globally.

Within agrifoodtech, this AI enthusiasm manifests in startups ranging from farm robot pioneers like Monarch Tractor and Carbon Robotics-both leveraging AI-powered automation to tackle persistent labor shortages and efficiency gaps-to supply chain optimizers such as Odeko, which deploys predictive algorithms to streamline restaurant logistics.

“Looking at cold inbound pitches, I’m seeing a striking number of founders branding-or rebranding-themselves as AI companies,” says AgFunder founding partner Rob Leclerc. “AI is eating VC dollars.”

Reflecting that, 13 out of the top 20 deals for US agrifoodtech in 2024 went to startups that make some use of AI, or at least mention it. While this doesn’t say much about actual deployment (it’s easy to talk about AI, much harder to implement it), it does underscore investor interest in the sector as it relates to agrifood.

3. VC Investment in Cyber Startups Surges 35%

Venture capital (VC) funds flowed in their billions to cybersecurity startups in the last three months of 2024, even as the number of deals fell, according to new data from PitchBook.

The capital market data specialist claimed in its Q4 2024 Information Security VC Trends report that was invested in the sector in the period, in North America and Europe.

That represents 35% year-on-year (YoY) growth and a 44% increase from the previous quarter.

However, the number of deals in Q4 2024 stood at 203 — down 11% from the previous quarter and 15% YoY.

“This suggests a trend toward larger but fewer deals, possibly indicating that investors are concentrating capital on higher-quality or later-stage opportunities,” the report noted.

Overall, $13bn was invested by VC firms into cyber startups in 2024, up 8% from the previous year. However, the number of deals fell 13% annually to 910. The market has a long way to go before it hits the recent highs of 2021, when $28.1bn was invested across 1396 deals.

The market in general appears to be more risk averse these days, hence the move towards later-stage funding of more mature cybersecurity companies. Late-stage deals captured $5.1bn of investment in 2024 versus $2.7bn early stage, $1bn in seed stage and $4.3bn in venture growth, PitchBook said.

Interestingly, data security startups dominated last year, receiving $1.7bn across 27 deals, followed by endpoint security ($628m across 22 deals).

4. Omni raises $69M to design tools that help companies better analyze their data

Employees at many companies today are expected to make decisions through careful data analysis, but the tools they need to do it are clunky, slow or — in some cases — don’t exist.

With cloud data warehouses like Snowflake and BigQuery, legacy reliability is merging with modern scalability,” Zima told TechCrunch. “Yet tens of thousands of businesses remain tied to outdated BI processes. Modern organizations demand the agility of self-service analytics without compromising centralized control. That gap represents a massive market opportunity — it’s why Omni was born.”

Omni’s platform lets users run ad hoc data analyses and build charts and reports, and also provides tools to create visualizations with components such as hyperlinks, text, and images.

In addition to a point-and-click interface for creating data queries and dashboards, Omni offers a compatibility layer for Excel spreadsheets and formulas. It can also take raw SQL, the language used to communicate with databases, and automatically parse and restructure it into “modeled concepts” that then become accessible in Omni’s interface.

Products built with Omni, like dashboards, can be brought into other applications via integrations, Zima added.

“We’ve seen other companies raise — and burn through — hundreds of millions [of dollars] trying to brute-force growth,” Zima said. “That’s not how we operate. Building everything you need in a BI tool is expensive because we’re competing with every major BI tool from the last 40 years. Our growth has been efficient and intentional, allowing us to focus on R&D.”

5. Scimplify raises $40M to help manufacturers access specialty chemicals

Scimplify, an Indian startup that helps pharmaceutical and agricultural companies access a range of specialty chemicals, has raised $40 million in a new funding round co-led by Accel and Bertelsmann India Investments to widen its footprint in the U.S. and reach new markets.

The Series B round pegs Scimplify’s valuation at about $150 million post-money, the company said.

Specialty chemicals are vital for manufacturing in many industries, but access is still a problem, as manufacturers of these chemicals are scattered across the world. Companies have mostly relied on Chinese suppliers to source such chemicals, but geopolitical tensions are increasingly pushing manufacturers to look for alternatives in other regions. Moreover, customers often find it hard to find a specific chemical if they are looking for a particular reactor, chemistry, or compliance such as U.S. FDA or GMP.

Scimplify aims to connect manufacturers with specialty chemical makers using its platform, ATOMS, which lists specialty chemicals from more than 5,000 factories run by over 200 manufacturers across 10 countries, including India, China, Vietnam, Egypt, and Japan. The startup primarily targets pharmaceuticals, agriculture, and industry.

The startup vets manufacturers, gets them audited by third-parties semi-annually, and segregates them based on their geography, chemistry, capacity, and compliance. It also process-engineers existing chemicals to make them cost-effective and relevant for different use cases.

Scimplify has so far served 600 customers across more than 16 countries worldwide, co-founder Sachin Santhosh told TechCrunch.

6. Celestial AI raises $250 million as it looks to speed up links between AI chips

Celestial AI is tapping photonics — a technology that uses light, rather than electrical signals — to create speedy links between AI computing chips and memory chips.

At present, Nvidia (NVDA.O), opens new tab reigns supreme in memory bandwidth with proprietary technologies called NVLink and NVSwitch. That has set off a technology race among startups and a flurry of funding to find alternatives that can be used by other chip firms. Celestial AI rivals and Lightmatter have raised $850 million and $370 million, respectively.

The goal of this “photonic fabric,” Celestial AI CEO Dave Lazovsky told Reuters, is to provide speed while saving space and power, the two things that are at a premium in every chip’s design.

“There are no good answers right outside of Nvidia,” Lazovsky said in an interview at the firm’s Santa Clara, California headquarters. “What we had created with the photonic fabric does the same thing, but at a different level of energy efficiency and of latency.”

7. US startup Flock Safety raises $275 million to fund manufacturing plant, R&D

The investment values Flock Safety at $7.5 billion, up from $4.8 billion in its previous funding round last year. It brings the Atlanta-based startup’s total funding to over $950 million, according to PitchBook data, making it one of the most well-funded startups in the region.

The funding marks Andreessen Horowitz’s third investment in Flock, an unusual move for the venture capital firm. Greenoaks Capital and Bedrock Capital also participated in the round.

Flock, which sells security cameras and software to help police and businesses tackle crime, said it had surpassed $300 million in annual recurring revenue, a 70% year-over-year increase.

The company added Brandon Simins as its CFO this year, as it readies for an eventual public listing, although the company doesn’t have a specific timeline.

Flock plans to launch U.S.-manufactured drones in 2025, as it builds out a 100,000-square-foot manufacturing facility in Georgia.

“I’m excited to bring more manufacturing in the U.S., which will give us more control over our supply chain and help with our mission to eliminate crime,” Flock CEO Garrett Langley said in an interview.

Founded in 2017, the company says its surveillance system uses artificial intelligence to provide insights to aid investigations, such as identifying car plates.

It now serves over 4,800 law enforcement agencies and nearly 1,000 businesses across major retailers and healthcare systems. Enterprise businesses account for about 30% of its revenue.

8. First line of defence: Blackwall raises €45 million to protect SMBs and rebrand

Led by Dawn Capital, with participation from existing investors MMC, Blackwall’s Series B funding will be used to double headcount and accelerate growth as the company expands further into the U.S. and APAC, and strengthens global channel partnerships.

Nikita Rozenberg , Co-founder & CEO, commented: “ With Blackwall, we are taking our mission to the next level-delivering gold-standard infrastructure protection to SMBs that have traditionally been overlooked. This funding enables us to scale globally and continue innovating for the businesses that need it most .”

Founded in 2019 by Nikita Rozenberg (CEO) and Denis Prochko (CTO), Blackwall defends web ecosystems from malicious automated threats, being already in use across more than 2.3 million websites and applications.

According to Blackwall, around 50% of all global web traffic stems from bots, 66% of which is malicious. Traditional solutions are priced and designed for enterprises, leaving SMBs — subject to 43% of all cyber attacks — potentially vulnerable.

Blackwall partners with Hosting Services Providers (HSPs), Managed Service Providers (MSPs) and eCommerce Platforms, which typically host thousands to hundreds of thousands of websites. This in turn protects the SMB customers that use Blackwall via their service and hosting providers.

Norman Fiore , General Partner, Dawn Capital commented: “ It is rare to see a business targeting SMBs which has such a broad offer, of which each component is best of breed. Blackwall’s innovative technology provides exactly that .

“Nik and Denis have devised a winning, channel-first strategy for their excellent product, and relentlessly executed on their bold vision. Blackwall has only scratched the surface of the expansive opportunity in North America and APAC, and we are confident that the company is uniquely positioned to transform how SMBs access advanced security solutions. We’re thrilled to be supporting the team as they further scale and pioneer a new approach to infrastructure protection .”

9. VC Fund Vento launches €75 million Fund II to back the “boldest” Italian founders

Turin-based , a private early stage venture capital fund, announced today the launch of its second fund — committing to find the “ €75 million over the next five years boldest “ Italian startup founders globally.

The fund is the flagship investment vehicle from the organisers of Italian Tech Week, a global event designed to support the growing tech ecosystem in Europe and inspire the next generation of Italian tech entrepreneurs.

“ We believe Italy’s technological and entrepreneurial potential has been underserved for too long ,” added Diyala D’Aveni , CEO of Vento. “ Through our three-pronged approach combining direct investment, venture building, and our annual tech conference, we are committed to changing this narrative and positioning Italy as a major European tech hub .”

Since its inception in April 2022, Vento looks to be a pivotal force in Italy’s fast-growing venture capital and tech ecosystem, with a mission to identify, support, and scale the next generation of Italian entrepreneurs globally.

Vento’s fund is chaired by John Elkann, with an Investment Committee including tech industry veterans Diego Piacentini, Mike Volpi, and Jean de La Rochebrochard. It is part of a three-pronged approach to building Italy’s underserved tech ecosystem and helping to foster a growing tech sector that is capable of rivalling Italy’s biggest global industries.

Vento has now invested in 100 startups including Bee, JetHR and Qomodo, reportedly making it one of the country’s largest early-stage portfolios in Italy. Its investment strategy focuses exclusively on Italian founders based in the country and around the world, with the US and the UK in the lead, followed by Germany and France. Fund II expects to invest in 375 investments over five years.

The platform has evaluated over 3,500 startups, resulting in about 100 investments in Italian Founders worldwide, maintaining a highly selective 2.5% conversion rate with a standardised €150k ticket size. Select follow-on investments are also made, helping the strongest Italian founders on their global scaling journey.

10. TastyUrban raises €6.5 million to create the largest digital-first restaurant franchise

The lead investor was IBB Ventures, with participation from Fulcrum, Monte Carlo Capital and existing investors Earlybird-X and Cardumen Capital.

“ We are not only solving a real issue for restauranteurs by optimising their kitchen performance and processes, generating significant incremental revenue for them, but are enabling small business owners to access and license our brands with minimal investment ,” says Felix Chrobog , CEO and Co-founder of TastyUrban.

TastyUrban was founded by Felix Chrobog, Marc Hansell, and Gerry Pidgeon in 2022. All three have in-depth industry expertise and have either Co-founded or held senior management positions at companies such as Gorillas, Tier, and Deliveroo.

TastyUrban develops and licenses out innovative food brands to underutilised restaurant and retail partners, reportedly generating monthly incremental revenue for them without incurring additional costs. In an increasingly competitive sector, TastyUrban has tapped into a significant opportunity of turning low-capacity spaces into host kitchens for its digital-first brands model.

Driven by the rapid growth of online food delivery operators, brick-and-mortar restaurants struggle. As per TastyUrban, 60% of new restaurants fail within year one, and 80% are insolvent within 5 years.

According to TastyUrban, restaurant owners face significant challenges. First, their space is underutilised with a shrinking in-house business while fixed and variable costs continue to increase. In addition, many lack innovation, are unable to differentiate from competitors, and lack digitalisation and brand-building know-how. With TastyUrban’s end-to-end platform, restaurants can potentially optimise their cost structure and operate profitable businesses.

Through TastyUrban’s dual market research approach — identifying both international trends and analysing missing local cuisine gaps — the company has rolled out multiple consumer brands including Birdie Birdie, Nanuh, and Fly Dumplings. Additional ones in the development phase range from fast-casual to fresh and health-centric concepts across Europe.

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