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This week we cover AI founders playing musical chairs, big defense tech investments, and other issues at Techstars.
This week's most interesting startup stories
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Founders and senior executives from some of the hottest AI startups are flying around this week.
OpenAI personnel changes: John Shulman, one of OpenAI's co-founders, left the company in May to join rival AI startup Anthropic, following former OpenAI chief scientist Ilya Sutskever, who launched a new startup a month later. Meanwhile, OpenAI president and co-founder Greg Brockman announced this week that he had decided not to search for a new “chairman,” opting instead to take an extended leave of absence to “relax and rejuvenate” from his duties at the AI giant. Read more
Character Development: Character.AI's founders also made some changes this week. Noam Shazeer, CEO of chatbot startup a16z, is returning to Google to join the tech giant's DeepMind team. Character.AI co-founder Daniel De Freitas is also joining Google, along with other employees. In a deal similar to the pseudo-acquisition Microsoft struck with Inflection in March, Google agreed to non-exclusive use of Character.AI's technology. Read more
BIG AMMO: Defense technology startup Anduril has raised $1.5 million in new capital, valuing it at $14 billion. The 7-year-old company, which develops autonomous military systems, aims to become a top defense contractor to rival Lockheed Martin and General Dynamics. The deal was co-led by Founders Fund and Sands Capital, with new participants including Fidelity Management & Research Company and Baillie Gifford. Read more
GrubMarket Beats Good Eggs: GrubMarket, a B2B produce and logistics company now valued at $3.5 billion, acquired Good Eggs, a 13-year-old fresh food delivery startup that was valued at $365 million in 2020. But the upscale grocery delivery startup, backed by top investors including Benchmark, Sequoia, and Thrive, plummeted 94% to $22 million after the COVID-19 tailwinds faded. Read more
Most interesting fundraisers this week
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Inching forward: Groq, a startup that makes chips to run AI models, has raised $640 million at a $2.8 billion valuation from investors including BlackRock, Neuberger Berman and Cisco. The eight-year-old company competes with Nvidia, which controls an estimated 70% to 95% of the AI chip manufacturing market, as well as Amazon, Google and Microsoft, which are working to develop their own AI chips. Read more
Location, location, and skyrocketing valuations: 13-year-old location analytics startup Placer.ai shows that knowing where your customers are remains incredibly valuable to retailers, banks, and healthcare companies. Placer quietly secured an additional $75 million in funding, bringing its valuation to $1.45 billion, a 50% increase from $1 billion just 18 months ago. Read more
why?! not: Maya Watson and Lexi Nishita, who met while working at Netflix and later moved to Clubhouse, where they were employees at ages 13 and 20, decided the world needed another social networking startup to help people combat loneliness. They launched a new app called why?! that combines a conversation app, a networking app, and a dating app. why?! has 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 kids begging you to watch more cartoons? You can keep them interested by playing with an AI bot instead. Heeyo, a startup that offers an AI chatbot that offers more than 2,000 interactive games and activities for kids ages 3 to 11, has raised a $3.5 million seed round from investors including OpenAI Startup Fund, Alexa Fund, and Pear VC. TechCrunch reporter Rebecca Beran tried Heeyo and found it to be completely safe for kids. Read more
This week's most interesting VC and fund news
Image credit: Bryce Durbin/TechCrunch
Fall: Techstars has lost some luster recently. The global startup accelerator laid off 17% of its workforce this week. Techstars will also close its $80 million Advancing Cities program by the end of the year. Launched in 2022 with backing from JP Morgan, the program aimed to support diverse founders in cities like Oakland, New York, Miami and Washington DC through its accelerator program. Read more
Flint Capital Accelerates Funding: Boston-based Flint Capital has raised its third fund of $160 million. The 11-year-old firm's limited partners are primarily technology entrepreneurs, including successful founders whom Flint has previously backed. Flint's investments include identity verification startup Socure, which was last valued at $4.5 billion, and Flo Health, which was recently valued at $1 billion. Read more
Last but not least
Image credit: Bryce Durbin
Funding may still be tough, especially for later-stage startups, but that doesn't mean investors aren't creating new unicorns. In fact, 38 new unicorns were born this year. Let's see who will have horns in 2024.
