Friday, August 9, 2024

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Welcome to Startups Weekly — your weekly recap of everything you can't miss from the world of startups.

This week we are looking at AI founders who are playing musical chairs, a massive defense tech investment, and more issues at Techstars. Let's get into it.

Most interesting startup stories from the week

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Founders and senior executives of the hottest AI startups have been leaping around this week.

OpenAI shuffle: John Schulman, one of the co-founders of OpenAI, left the company for rival AI startup Anthropic, following in the footsteps of Ilya Sutskever, the former OpenAI chief scientist who left the company in May and launched a new startup a month later. In the meantime, OpenAI president and co-founder Greg Brockman announced this week that he decided not to find a new "chair," opting to take an extended leave to "relax and recharge" from his duties at the AI giant. Read more

Character development: Founders of Character.AI also did some seat switching this week. The a16z chatbot startup's CEO, Noam Shazeer, has returned to Google to join the tech giant's DeepMind team. Character.AI co-founder Daniel De Freitas is also joining Google with some other employees. In a deal that resembles a pseudo-acquisition similar to the one Microsoft struck with Inflection in March, Google agreed to use Character.AI's technology on a non-exclusive basis. Read more

Mega ammo: Defense tech startup Anduril has armed itself with $1.5 million in fresh capital at a massive $14 billion valuation. The 7-year-old company, building autonomous military systems, has its sights set on becoming a top-tier defense contractor, rivaling the likes of Lockheed Martin and General Dynamics. The deal was co-led by returning backers Founders Fund and Sands Capital and was joined by new participants, including Fidelity Management & Research Company and Baillie Gifford. Read more

GrubMarket cracks Good Eggs: B2B produce and logistics company GrubMarket, which is now valued at $3.5 billion, has acquired 13-year-old Good Eggs, a fresh food delivery startup that was valued at $365 million in 2020. But the high-end grocery delivery startup that was backed by top investors, including Benchmark, Sequoia and Thrive, was marked down by 94% to $22 million after COVID-19 tailwinds faded. Read more

Most interesting fundraises this week

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Chipping away: Groq, a startup that is manufacturing chips for running AI models, has raised $640 million at a $2.8 billion valuation from investors, including BlackRock, Neuberger Berman and Cisco. The 8-year-old company competes with Nvidia, which is estimated to control 70% to 95% of the AI chip manufacturing market, as well as Amazon, Google and Microsoft, all of which are working on developing their own AI chips. Read more

Location, location, a bump in valuation: The 13-year-old location analytics startup Placer.ai shows that knowing where the customers are is still very valuable for retailers, banks and healthcare companies. Placer quietly secured an additional $75 million in funding, valuing the company at $1.45 billion, a 50% increase from its previous valuation of $1 billion just 18 months ago. Read more

why?! not: Maya Watson and Lexi Nisita, who met while working at Netflix and later moved to Clubhouse, where they were employees 13 and 20, decided that the world needs another social networking startup to help people combat loneliness. The duo started a new app called why?! that's part conversation app, part networking app and part dating app. why?! raised $1.65 million in a pre-seed round, led by Charles Hudson, managing partner and founder of Precursor Ventures. Read more

AI for little ones: Tired of your child begging you to watch another cartoon? Perhaps you can interest them in playing with an AI bot instead. Heeyo, a startup that offers children between the ages of 3 and 11 an AI chatbot that offers over 2,000 interactive games and activities, has just raised a $3.5 million seed round from OpenAI Startup Fund, Alexa Fund, Pear VC and other investors. TechCrunch reporter Rebecca Bellan tried out Heeyo and found it to be perfectly safe for kids. Read more

Most interesting VC and fund news this week

Image Credits: Bryce Durbin/TechCrunch

Falling stars: Techstars has been shining less brightly recently. The global startup accelerator laid off 17% of its workforce this week. Techstars will also wind down its $80 million Advancing Cities program by the end of the year. Launched in 2022 with J.P. Morgan's backing, the program aimed to support diverse founders in cities like Oakland, New York, Miami, and Washington, D.C., through accelerator programs. Read more

Flint Capital sparks funding: Boston-based Flint Capital has raised a $160 million third fund. The 11-year-old firm's limited partners include primarily tech entrepreneurs, including successful founders that Flint backed previously. Flint's investments include identity verification startup Socure, last valued at $4.5 billion, and Flo Health, which was recently valued at $1 billion. Read more

Last but not least

Image Credits: Bryce Durbin/TechCrunch

Funding may still be hard to secure, especially for late-stage startups, but it doesn't mean investors aren't minting new unicorns. In fact, we counted 38 new ones that were created this year. Find out who grew a horn in 2024.