Startup Monday: Latest tech trends & news happening in the global startup ecosystem (Issue 91- June 10)

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1. AI Startup Cohere Locks Up $270M At $2.2B Valuation

Toronto-based Cohere became the latest artificial intelligence startup to raise big money at an even bigger valuation.

The startup raised a $270 million Series C led by Inovia Capital at a valuation of $2.2 billion.

Other investors in the round include some big corporate names — Nvidia, Oracle, Salesforce Venture

Cohere builds large language models that allow AI to learn from new data, and can be customized and put into applications for features like interactive chat or to generate text.

Umesh Padval, a venture partner at Thomvest Ventures, told Crunchbase News his firm made the investment for a handful of reasons, including Cohere’s engineering and management teams, its multi-cloud and hybrid cloud approach and its significant strategic channels option — as well as the market in general.

There is a “massive market opportunity in LLM space which is exploding,” Padval said. “Cohere has all the elements which would make them successful.”

AI trends

The Cohere round illustrates two trends right now in AI — big money and some of that money from big-name tech companies.

Nvidia, for instance, just became a trillion-dollar market cap company after its shares exploded thanks to demand for its chips used in AI. The company, like several other tech titans, has been placing bets into AI startups for years. The same can be said for Salesforce Ventures, which just last month participated in the $450 million Series C for Anthropic — a ChatGPT rival with its AI assistant Claude — which also included Google and Zoom Ventures.

Of course, the Cohere and Anthropic deals are not the only huge AI deals recently.

In April, AlphaSense, an AI-enhanced market intelligence platform, raised $100 million from investors that included CapitalG — Alphabet’s independent growth fund.

In March, Character.ai closed a $150 million Series A at a $1 billion valuation led by Andreessen Horowitz. The Palo Alto, California-based AI startup allows people to create their own personalized AI chatbot using language models and deep-learning algorithms.

Also in March, San Francisco-based Adept AI raised $350 million in a Series B — at a reported post-money valuation of at least $1 billion.

Of course, the craze started in January with news of Microsoft’s massive $10 billion investment into OpenAI — the creator of ChatGPT.

2. European startup funding to drop a further 39% this year as a tech rout continues

Investment into European tech startups is set to fall another 39% this year, according to data from venture capital firm Atomico, as the pain in global tech continues.

Funding for Europe’s venture-backed startups is forecast to decline from $83 billion in 2022 to $51 billion in 2023, Atomico said.

That was largely down to a retreat from U.S. investors. American funds have previously been a significant driver of funding activity in Europe, and several notable VC funds in the U.S. have set up shop in London to increase their investments in the region.

The further drop in funding in Europe follows a brutal year for the technology industry last year — investment for private tech startups in Europe declined 22% to $83 billion in 2022 from $106 billion in 2021, Atomico.

The report is a scaled-down, mid-year update from the London-headquartered fund, which has backed companies including Stripe, Klarna and Graphcore.

Atomico said there were some signs of “resilience” in Europe’s tech industry, including the fact that the overall value of public and private companies regained the $3 trillion mark it attained in 2021.

Meanwhile, early-stage firms have seen their funding reduced by less than their later stage counterparts, Atomico said, with funding for companies raising sub-$15 million round slipping to $8.2 billion in the first half of 2023, down from $10.3 billion in the same period a year ago.

Later stage firms are expected to account for 93% of the overall $28 billion loss in investment between 2022 and 2023, Atomico said.

Technology firms have come under huge strain over the last year-and-a-half, with companies being pushed to prioritize profitability over growth at all costs as investors reevaluate the sector.

Once richly-valued technology companies have seen their shares come under pressure from global factors, including Russia’s full-scale invasion of Ukraine and tighter monetary policy.

3. Pigment secures $88 million for its business planning tool that will make you forget about Excel

Paris-based startup Pigment has raised a Series C round of $88 million — the investment was led by Iconiq Growth. Pigment wants to take on Microsoft Excel and offer a business planning platform that works better than products from enterprise software behemoths, such as Oracle or SAP. It’s a new take on a critical product for large companies that need to forecast, budget and build comprehensive reports.

In addition to Iconiq Growth (which previously invested in companies like Adyen, Datadog, GitLab, Miro and Snowflake), existing investors Meritech, IVP and FirstMark are investing in Pigment once again. Julien Codorniou, who is an angel investor in Pigment, is now also investing in the startup through his VC firm Felix Capital.

The best way to describe Pigment is by describing what it can do. It’s a flexible product that can be used by multiple teams in big companies. Chief financial officers — and finance teams in general — use it to gather all business data to create reports and plan for the future.

Sales team leaders can use it to track quotas and see how everyone is performing against quarterly quotas. HR teams can see how they should scale the workforce up and down based on strategic changes and financial objectives.

Just like Microsoft Excel, Pigment wants to be a generic tool. If you want to use it for carbon accounting and track your total emissions, you can start importing data and create a dashboard for that use case. Pigment also recently added a new spreadsheet view so that Excel users feel right at home when they are typing formulas.

4. Bonside launches with $4.35M to provide growth capital to brick-and-mortar businesses

Online shopping is typically where much of the commerce financing has focused on over the past three years. However, during this time, some retailers that started in e-commerce are diversifying and going the brick-and-mortar route. That’s probably because 54% of consumers still prefer to go into a physical store.

Like other businesses, they need money for a shop, but finding financing isn’t easy. Banks have been slow to offer better growth capital options, while some startups — such as Onramp Funds — focus on e-commerce. And venture capital isn’t for every business.

Enter Bonside, a financing platform designed for brick-and-mortar businesses that provides growth financing through revenue. Today, the company launched out of beta with an equity financing round of $4.35 million from a group of investors, led by Floating Point, which also includes 81 Collection, TMV and Philz Coffee’s Jacob Jaber.

“Venture capital is a beautiful instrument for tech businesses or businesses seeking some form of hockey stick growth, but it’s less transferable if you’re going after a slightly more linear growth or not a software play,” Bonside founder and CEO Neha Govindraj told TechCrunch. “Also venture capital is so expensive for a business like mine. It doesn’t make sense for me to give up like 2% of my business or 10% of my business every time I want to open a location.”

In 2018, Govindraj co-founded Glowbar, a New York–based company offering skincare treatments. It was while considering Glowbar’s real estate footprint that she realized businesses like hers didn’t fit the model of a traditional venture-backed company.

As a result, she created Bonside with a unique financing model structured via Repeatable Revenue Agreements, which Govindraj described as similar to what Y Combinator does with SAFE notes for startups.

Here’s how it works: The agreement is capital in exchange for a percentage of that business’ revenue. Business owners maintain ownership and repay via the revenue until they reach a fixed cap. Meanwhile, accredited investors benefit from overall reduced risk, exposure to their localities and a passive income source that outperforms market standards, Govindraj said.

5. Amsterdam-based Smiler snaps €7.9 million to expand globally, launches photo booking platform

Smiler, a Dutch startup that connects photographers with visitors at popular tourist locations and hotspots, announced the successful completion of its latest funding round of €7.9 million. Led by Octopus Ventures, this investment brings Smiler’s total funding to over €13.9 million, propelling the company’s expansion plans and its mission to offer affordable, high-quality photoshoot experiences around the world.

With the newly acquired funds, Smiler aims to introduce thousands of new locations and photoshoot experiences in the next year. The photography marketplace is already integrated with leading Online Travel Agencies (OTAs), further enhancing the tours, activities, and attractions sector.

Smiler’s funding announcement is also paired with the launch of Smiler.co, a consumer website that taps Smiler’s supply of 20,000 photographers, allowing consumers to find, plan and book these quick and easy photoshoots in advance. Smiler.co already lists some of Europe’s most iconic, must-see destinations where Smiler photographers can be found, including Paris’s Eiffel Tower, the Colosseum in Rome, and Barcelona’s La Sagrada Familia, with new locations added every week.

“The process of starting your own photography business, self-promotion, and generating bookings traditionally requires significant effort, connections, and a bit of luck,” says Smiler CEO and co-founder Kasper Middelkoop. “Smiler simplifies this process, enabling photographers to connect directly with real consumer demand for high-quality photography using just their camera and the Smiler Photographer app.”

With the global revenue in this industry anticipated to exceed pre-COVID levels, hitting an expected mark of €241 billion by 2024 according to research from Phocuswright and Arival, Smiler is uniquely positioned to capitalise on the growing demand for unforgettable travel experiences by capturing them in high-quality.

6. London-based Just Climate closes inaugural €1.4 billion industrial climate solutions fund backed by Microsoft

Just Climate, an investment business established by Generation Investment Management to address the net-zero challenge at scale, has announced the closing of its inaugural fund, Climate Assets Fund I (the “Fund”). The Fund exceeded its €930k target, raising €1.4 billion in institutional capital to invest in the highest impact solutions that can radically reduce or remove emissions, while generating attractive risk-adjusted financial returns.

Just Climate’s integrated approach to impact management is embodied in the Fund’s long-term incentive structure. Under the Fund’s integrated performance fee, financial returns drive the amount of performance fee accruable. How much of the performance fee is ultimately available is 100% linked to the delivery of ambitious greenhouse gas abatement goals. With this approach, Just Climate is demonstrating its conviction that climate solutions for the hard-to-abate industries are capable of delivering attractive risk-adjusted returns and the highest climate impact.

The Fund closed with a diverse set of institutional investors with a far-reaching geographical spread, including California State Teachers’ Retirement System (CalSTRS), PSP Investments, AP4, Colonial First State Investments, Builders Asset Management and AP2; as well as other pensions, sovereign wealth funds, insurers, financial institutions, endowments, foundations and family offices from North America, Europe and the Asia Pacific region.

The Fund’s founding investor group included Microsoft’s Climate Innovation Fund which anchored the Fund, IMAS Foundation, Ireland Strategic Investment Fund, Harvard Management Company, the Imprint Group of Goldman Sachs as well as Hall Capital Partners and its clients.

Clara Barby CBE, Senior Partner of Just Climate, says: “Establishing climate-led investing as a capital allocation imperative is core to our mission. We start with climate impact, identify solutions that will make the biggest difference, and then direct and scale institutional capital to those solutions that we believe can generate attractive risk-adjusted returns. We’re grateful that many of the world’s most significant institutional investors see the opportunity that climate-led investing represents — for capital markets, for the planet and for people everywhere.”

7. Cambridge-based Uncommon raises €28 million to scale cultivated pork to mainstream

Consumers are well aware of the many problems associated with the meat industry. Whilst the environmental cost and shocking animal cruelty involved in meat production have been widely reported, data has shown that very few consumers are prepared to change their diets long-term. Plant-based meat products were heralded as the key to encouraging people to eat less meat yet sales fell 14% in 2022.

Where the plant-based market has failed to win over consumers, cultivated meat is set to have an impact and wrestle share from the meat industry. This is a rapidly growing industry, expected to reach $427 billion in value by 2040, with startups creating a diverse menu of products that ranges from burgers and chicken nuggets to sausages and steaks.

To support its development, Uncommon, a startup leveraging cell technologies for the health of humanity, starting with cultivated pork, has raised €28 million in Series A funding, bringing the total raised to €32.5 million. The funding will be used to continue to bring the cost of goods down, apply for regulatory approval, and scale up production at its pilot manufacturing facility at Cambridge Technopark, whilst doubling the team over the next 18 months to further expand the company’s capabilities.

Balderton Capital and Lowercarbon led the financing round. The funding also includes participation from Red Alpine, East Alpha and previous investors Max and Sam Altman, Miray Zaki and Sebastiano Castiglioni.

Benjamina Bollag, founder and CEO of Uncommon, says: “From a young age, I have always been aware of how diets and food choices can disproportionately impact our health. This led me to found Uncommon, a biocreation company that uses the power of cells to tackle the most pressing challenges to our health, starting with cultivated pork. As the only cultivated meat leveraging RNA technologies, we believe we have a competitive advantage that could help us become the largest protein company in the world. I’m delighted with the progress we’ve made so far as a company and look forward to working closely with our new and existing investors to continue to build on this progress and make a difference to global health.”

8.Instabase lands $45M investment to help companies automate document processing

Instabase, a startup providing an apps platform that can be used to understand and analyze “unstructured” data, today announced that it raised $45 million in a Series C round led by Tribe Capital, with participation from Andreessen Horowitz (a16z), New Enterprise Associates and Spark Capital.

The round values Instabase at $2 billion — double its previous valuation — and comes as the company looks to increase its investment in generative AI.

“At Instabase, we’ve built a platform that’s trusted by some of the most demanding global enterprises in some of the most highly regulated industries,” Anant Bhardwaj told TechCrunch in an email interview. “Instabase is a platform that enables organizations to apply the latest AI innovations to understand their unstructured data and build applications.”

Bhardwaj founded Instabase in 2015 while working on his Ph.D. at MIT. The inspiration came from the gap he saw in the market for a platform where enterprise apps and data could be quickly built and deployed, he says.

At a high level, Instabase offers tools to help with content understanding. The platform processes documents and data companies can use for their operations, querying large corpora of files — e.g. academic papers, legal paperwork, financial data, etc. — at once.

Beyond this, Instabase delivers tools companies can use to deploy workflows for analyzing similar types of documents. For example, using Instabase, a customer could build an app to automate things like income and identify verification processes, invoice processing and receipt verification.

Companies can alternatively opt for pre-built apps from Instabase’s marketplace. There are apps for verifying a passport or driver’s license, cross-checking a person’s income, prefilling tax forms and more.

“Instabase continually identifies and evaluates emerging AI models and technologies for content understanding,” Bhardwaj said. “With the innovation in this space and multiple players entering the [generative AI] race, it will be critical for customers to leverage modular technologies that can quickly take advantage of the latest innovation.”

9. Cybersecurity startup Blumira raises $15M for its extended detection and response platform

Cybersecurity startup Blumira Inc. today announced that it has raised $15 million in new funding to bolster the launch and development of its new extended detection and response platform.

Founded in 2018, Blumira offers a security information and event management system that aggregates security information from an organization’s threat detection tools and analyzes the data for patterns to find signs of a cyberattack.

SIEM platforms are a dime a dozen, but Blumira stands out because its platform is specifically designed to cater to small to medium-sized enterprises. The company’s platform combines SIEM, endpoint visibility and automated response to help organizations with small information technology teams consolidate tools, reduce complexity and provide insight across their entire environment.

Blumira claims that its platform saves teams time and effort in threat response. A key feature, automated host isolation, enables users to contain an endpoint threat until it can investigate further.

The company has found success with its offering, with 100% year-over-year customer growth, including an eightfold increase in its managed service provider channel. Blumira’s clients include those in manufacturing and healthcare, as well as credit unions, colleges, universities and municipalities. Notable customers include Diraflame Inc., Fechhiemer Brothers Co., National Machinery LLC and Tas United LLC.

“Security remains a significant manual lift for small teams,” Blumira Chief Executive Officer Jim Simpson said ahead of the announcement. “We think there’s a huge opportunity to deliver simplified security for the SMB market, reducing reliance on people to complete manual security tasks to help companies achieve faster time to security.”

Ten Eleven Ventures LLC led the Series B round, with RPS Ventures, Mercury Fund, HPA, and Duo Security co-founder Jon Oberheide also participating. According to data from Crunchbase, Blumira has raised about $28 million to date, including the new round today.

10. Space Robotics Startup GITAI Raises US$30 Million in Funding

GITAI USA Inc. and GITAI Japan Inc. (GITAI), the world’s leading space robotics company, has completed a Series B Extension round of funding totaling 4 billion yen (approximately US$30 million) to accelerate and expand their business and technology development in the US.

The funds raised in this round will be primarily used to achieve the following objectives:

• Enhancing the Technology Readiness Level (TRL) of GITAI’s Lunar Robotic Rover and Lunar Inchworm Type Robotic Arm.
• Expanding the Engineering Model/Flight Model Manufacturing Facilities in the US.
• Further expansion of employment in the US.

“We are thrilled to further expand our operations in the US,” said Sho Nakanose, GITAI’s Founder & CEO. “While SpaceX and BlueOrigin are reducing the cost of transportation to space by 100 times, we at GITAI are taking on the challenge of reducing labor costs by 100 times. We will provide the most labor for the Moon and Mars and build infrastructure such as solar panels, communication antennas, fuel generators, and habitation modules.”

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