Startup Monday: Latest tech trends & news happening in the global startup ecosystem (Issue 85- April 1)
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Top startups news to follow this week:
Google and Apple vets raise $17M for Fixie, a large language model startup based in Seattle
The news: Fixie, a new Seattle-based startup aiming to help companies fuse large language models into their software stack, raised a $17 million seed round.
The context: Large language models, or LLMs, are algorithms that power artificial intelligence systems such as OpenAI’s ChatGPT. They can ingest huge amounts of data, learn from those datasets to improve the algorithm, and perform a variety of natural language processing tasks. LLMs are gaining traction and attention with the proliferation of technologies such as ChatGPT.
The pitch: Fixie is positioning itself as an “automation platform for large language models.” It wants to help developers integrate any LLM into their own applications. “Fixie is a cloud-based platform for building, hosting, and scaling natural language agents that integrate with arbitrary tools, data sources, and APIs,” the company said in a blog post. “Fixie can be used to automate business processes, build natural language understanding into existing products, answer questions about data hosted behind APIs, and more.”
The use case: Fixie said its software can be used for customer support, business automation, business intelligence, content generation, CRM automation, and more. “We’re building solutions with customers to automate support ticket processing, enable custom chatbots that can query disparate data sources, and integrate generative AI into applicant tracking systems,” it said in the blog post.
2. Chinese startup exit slowdown
Last year wasn’t a great year for money flowing into China-based venture capital, or for Chinese startup exits.
Why it matters: Distributions are important to keep limited partners backing Chinese funds, and thus, backing startups.
By the numbers: While the second half of the year was much stronger, 2022’s total exit value was $157.7 billion — less than half of 2021’s record $289.2 billion, per PitchBook.
- 2022 only had $22 billion in venture-backed exits with participation from foreign investors, a huge dip from 2021’s 164.7 billion, and the lowest amount since 2016. This translated to only 17 exits, down from 56 in 2021.
Yes, but: China’s IPO market has remained stronger than the rest of the world, with 201 public listings in 2022 (131 taking place in the second half).
- This is also important because almost all exit value since 2019 has come from public listings.
3. Autonomous AI agent startup Fetch.ai raises $40M round led by DWF Labs
Cambridge, U.K.-based artificial intelligence lab Fetch.ai Ltd. which is building decentralized networks for smart infrastructure and AI-powered peer-to-peer applications, today announced it has raised $40 million in a round led by DWF Labs.
Using Fetch.ai’s platform, developers can build and deploy peer-to-peer applications that can act autonomously on the behalf of users. It uses artificial and machine intelligence to handle things such as booking hotel rooms, hailing rides and finding parking spaces in the most efficient manner possible.
The vision of the company is to provide a framework for developers to build applications capable of connecting digital and real-life economies rapidly to can enable automation over decentralized networks that use data in novel ways.
At the core of that is AI agents that act on the behalf of humans, organizations or machines across networks and can execute business logic. Fetch.ai’s agents operate independently and interact with each other across an immutable, distributed blockchain ledger to store and access their data. That allows them to collaborate, process and negotiate all of their interactions and requires no human interaction.
Any resulting agreements between agents are recorded to the Fetch.ai blockchain using its native token, FET. It’s also the medium of exchange used to pay for services provided by Fetch.ai applications.
Developers have built and trialed several solutions using Fetch.ai’s platform that take advantage of the autonomous AI agent technology. In late 2020, Datarella GmbH, an industrial blockchain solutions company, partnered with Fetch.ai to pilot a smart parking space management program in Germany that would help the providers of parking spaces efficiently match up with clients who needed parking spaces. Fetch.ai’s system would autonomously negotiate the “price” of the parking spaces based on the availability and demand of the spaces and apply AI learning to provide the best possible experience.
Fetch.ai also launched Autonomous AI Travel agents capable of connecting people to over 770,000 hotels worldwide via the Amadeus global distribution system. The network of autonomous agents works to collect data on the behalf of users to book hotel rooms using the company’s peer-to-peer AI and consensus network. Trained on user preferences and hotel room inventory, the agents work to discover the most economical bookings for the users and offer them potential rentals, sometimes saving up to 10%.
4. 5 strategies for biotech startups to outlast a market downturn
Founders in the biotech industry are no strangers to challenges. Success is impossible to come by without substantial investment, time and technical expertise. Although life science startups managed to come out relatively unscathed last year, the enduring economic climate is turning fundraising into a never-ending marathon. Inflationary market dynamics and ongoing fiscal tightening continue to pose significant risks to capital commitments. A successful raise in 2021 feels like ancient history.
As a venture capitalist specializing in early-stage life science companies, I work with startups that have the potential to revolutionize the world against biothreats, pandemics and more. Every day I see new biotechnology that inspires my team and our investors to put capital to work. Many of these startups were well capitalized last year but are now facing difficulties as they look to raise.
To ensure survival, it’s essential to explore alternative funding methods rather than relying solely on classic fundraising. This is especially true for biotech startups, where investment needs are higher and success timelines can be much longer.
If you’re an entrepreneur in the biotech industry, it could be time to make practical pivots to ensure your company can thrive. Here are five strategies that could help your biotech startup navigate a cooling fundraising environment: read more
5. Crypto wallet company Ledger raises another $108 million
French startup Ledger has added more money to its Series C funding round. The company designs and manufactures so-called hardware wallets to secure crypto assets. In 2021, the company raised €356 million ($385 million at today’s exchange rate). And the company is adding another €100 million ($108 million) in new funding.
This is an extension round as the valuation of the company isn’t changing — €1.3 billion ($1.41 billion at today’s exchange rate). In the current funding environment, raising at the same valuation is already quite impressive.
Once again, the company has managed to line up a long list of investors. New investors in the company include True Global Ventures, Digital Finance Group and VaynerFund. Some existing investors are also investing in Ledger once again, such as 10T, Cité Gestion Private Bank, Cap Horn, Morgan Creek, Cathay Innovation, Korelya Capital and Molten Ventures.
Ledger’s main products are hardware crypto wallets that offer a high level of security. The company’s current devices are shaped like USB keys and feature a tiny screen to confirm transactions on the device.
Hardware wallets are secure by design because the private key of the crypto wallet never leaves the device — it is stored in a certified secure chip. When you want to send some crypto tokens, you have to use another device like a computer or a smartphone. When you enter the public address of the recipient in the Ledger Live app, you have to validate the transaction with the private key. That’s why you need to turn on your Ledger wallet and confirm the transaction.
When you first boot up your Ledger device, the company asks you to write down a 24-word recovery phrase on a piece of paper. You should then store this recovery phrase in a safe place as it allows you (or someone else) to recover your wallet in case you lose your Ledger wallet.
And it’s true that having a secure wallet doesn’t prevent scams. In July 2020, Ledger discovered a data breach of personal information stored in an e-commerce and marketing database. It led to phishing campaigns with scammers trying to obtain recovery phrases.
6. Parloa raises $21M to add a little automation to contact centers
It’s estimated that over $400 billion are spent annually to run customer contact centers around the world. To cut costs, in recent years, contact centers have embraced AI and automation; research from The Harris Poll indicates that 46% of customer interactions were already automated as of 2021.
That’s good news for the vendors selling contact center automation software. VCs believe that to be the case, certainly, judging by recent investment upswing. Startups including Invoca, Replicant, PolyAI and Observe.ai have raised hundreds of millions of dollars from backers over the past year alone, reflecting the bullish views of labor-saving customer service tech.
Another winner in the contact center automation boom is Parloa, a German-based enterprise software provider that uses a combination of conversational AI tech and low-code tools to help companies lighten the load on their contact center employees (or so the sales pitch goes). Parloa today announced that it raised €20 million (~$21.67 million) in a Series A funding round led by EQT Ventures, with participation from Newion and Senovo.
The fresh cash, which brings Parloa’s total raised to €25 million (~$27.09 million), will be put toward customer acquisition efforts, opening a U.S. office and product R&D.
“AI is waiting in the wings right now to disrupt the multi-billion customer service market for good,” co-founder and CEO Malte Kosub told TechCrunch in an email interview. “The status quo in customer service is the same across Europe, Middle East, and Africa and the U.S.: not a good customer experience. So also the speed of the AI adoption in customer service will be the same in those areas.”
7. Robotic Food Delivery Startups Taking Over With Projected $1.8 Billion Industry Growth
The future is here, and it looks like robots delivering food straight to your door.
The rise in online food ordering and delivery services has created a demand for fast and accurate processes, driving many eateries to seek out innovative solutions for optimizing their delivery pipelines.
Cue the robots. Autonomous and semiautonomous delivery systems offer a high degree of consistency, enabling faster order processing and reduced time spent navigating traffic, ultimately resulting in quicker service and higher levels of customer satisfaction.
Companies such as Kiwibot and Starship Technologies have made significant strides in this area. Kiwibot leases delivery robots and Starship launched on-demand food delivery services on college campuses.
Retail investors have been investing millions into AI startups like RAD AI and Atombeam. RAD AI has raised over $3.1 million from retail investors for its current Wefunder raise to scale its AI marketing platform. AtomBeam’s StartEngine campaign has already cleared $1.2 million for it’s patented AI data compaction platform.
Kiwibot: Kiwibot signed a groundbreaking $10 million deal with kineo finance, a Swiss asset financing group. The deal marks a significant milestone for the autonomous delivery sector, as it’s the first of its kind and indicates it has reached the next stage in its maturity. With the help of leasing, Kiwibot can focus on developing and expanding its service beyond its current base and further revolutionize how customers receive their meals.
Its robotic delivery service is raising eyebrows with its combination of traditional GPS and generated maps. These smart robots can identify multiple routes to ensure timely delivery to their destinations. To supplement their navigation, each Kiwibot comes equipped with its own onboard software and remote monitoring to ensure smooth operations. This level of sophistication comes at a price, making each unit costly. Despite the expense, Kiwibot remains committed to providing its customers with high-quality service, even if it means investing in advanced technology.
8. OpenAI backs Norwegian bipedal robot startup in $23m round
1X Technologies in Norway (formerly Halodi Robotics) has raised $23m to commercialize its AI-enabled bipedal robot led by the company behind ChatGPT.
“Over the past eight years, we have developed unique actuator systems and AI, commercializing an android that now serves the US enterprise markets,” said 1X. “We believe that our new name, 1X, better reflects who we are as a company and our vision to augment labor using androids.”
The Series A2 funding round led by OpenAI raised $23.5 million with participation from Tiger Global and a consortium of Norway-based investors, including Sandwater, Alliance Ventures, and Skagerak Capital.
The cash will be used to build the upcoming NEO bipedal android as well as scale manufacturing of its first commercially available wheeled android EVE in Norway and North America. The company was founded in 2014 and has 560 staff globally having previously raised $13m.
9. Climate tech Agreena raises €46m Series B to fight climate change with carbon sinks
While fingers are being pointed at agriculture for causing 30% of carbon emissions (according to the UN’s Food and Agriculture Organisation), some startups are coming up with ways of helping farmers change that.
One of them is Danish farming startup Agreena, which today announces a €46m Series B led by German-based VC firm HV Capital. The cash injection comes only one year after its €20m Series A.
Agreena is trying to incentivize farmers to adopt regenerative farming practices and has developed a way for them to turn soil into a new revenue stream by trading in carbon credits.
The fresh cash will be used to expand into the western part of Europe and develop other possible verticals.
The problem with agriculture today
Using regenerative farming to tackle the human-caused greenhouse gas emissions that originate from our agri-food systems is a top priority for the Intergovernmental Panel on Climate Change (IPCC) and the EU.
The latest IPCC report, published last week, emphasized that to prevent the worst of the climate crisis, the world’s food and agricultural systems require significant transformation.
But that’s easier said than done.
Farming is a low-margin business, and it’s costly for farmers to adopt regenerative agricultural methods, which include minimizing soil disturbance, using cover crops and crop rotations, reducing or eliminating the use of synthetic fertilizers and pesticides and integrating livestock into cropping systems.
Agreena’s solution
Agreena was founded in 2019 and has developed a platform through which farmers can earn carbon credits for turning their land into carbon sinks — naturally removing CO2 from the atmosphere and storing it.
10. VC dealmaking in climate tech slows dramatically
VC funding for climate tech startups has slowed to its lowest pace in nearly three years, a worrying sign for an industry that had, until recently, brushed off the tech market downturn.
In Q1, climate tech startups raised $5.7 billion across 279 VC deals, according to PitchBook data. That’s a 36% decline in deal value and a 31% decline in deal count from the previous quarter. From its peak in Q3 2021, quarterly deal value has fallen more than 50%.
The data, though still early, send a concerning signal to industry critical to developing technologies for the energy transition. The world faces a catastrophic warming threshold within the next decade, UN scientists warned in a report this month. The report, which estimated that the Earth will exceed a 1.5 degrees Celsius (2.7 degrees Fahrenheit) warming target by the early 2030s, urged “deep, rapid and immediate action.”
“I’m a little bit worried,” said Seonghoon Woo, co-founder of clean energy startup Amogy. Woo said that raising their latest round, a $139 million Series B-1 led by SK Innovation, took longer than six months. “Certainly, it was hard because the market wasn’t looking great, and that still is the case.”
Climate tech was one of the most resilient segments of the private market last year. Carbon and emissions tech startups raised $13.8 billion in VC deals compared to $14.1 billion the previous year, a dip of just 2%, according to PitchBook data. That was despite a bear market that stalled VC funding across nearly every industry.
