Welcome to Startups Weekly — your weekly recap of everything you can’t miss from the world of startups.
Despite this general downturn, certain segments like generative AI continue to attract significant funding, indicating a selective yet substantial interest in specific AI applications.
AI investment is slowing down for a few reasons, like the crowded market and the steep costs of building big AI models.
Investors are getting pickier and want to see real, solid returns instead of just throwing money at hopeful growth.
(That isn’t stopping them from raising billion-dollar funds focusing on AI, of course.)
NASA’s decision to scrap its $11 billion, 15-year mission to Mars to bring back samples could create a startup feeding frenzy, TechCrunch reports.
Describing its plans as too slow, and too expensive, NASA is going back to the drawing board, with an eye on getting the space industry to help.
But space startups are not worried about it.
So, the NASA money might have a bunch of startup-sized buckets to drip into, and I am here for it.
To that end, if any startup that works with NASA on the Mars rock mission needs a human to send up there to check on the dials and such, I’m your guy.
What is worth $11 billion and wants to go to Mars to collect rocks?
NASA’s mission to Mars to collect rocks that was expected to cost $11 billion and take ages.
So, the U.S. space agency is throwing the doors open to get more input, and that means that startups are looking at an opportunity that is truly out of this world.
To close, the massive, gobsmackingly big $7.2 billion worth of new funds from a16z.
For the full interview transcript, for those who prefer reading over listening, read on, or check out our full archive of episodes over at Simplecast.
Business banking startup Mercury, founded in 2020, is now launching a consumer banking product.
“We already have a few hundred thousand users of our business banking product, and a lot of people have expressed that they want a personal banking product,” he told TechCrunch in an interview.
The person also said the fintech partner banking market as a whole has been the target of more regulatory scrutiny.
Crossing overBut success in B2B banking doesn’t automatically queue up Mercury to handle consumer banking.
Sign up for TechCrunch Fintech here.
NASA Administrator Bill Nelson has pronounced the agency’s $11 billion, 15-year mission to collect and return samples from Mars: insufficient.
But the strategy shift could be a huge boon to space startups, to which much of that planned funding will almost certainly be redirected.
(There’s plenty of time to save and repurpose the most important concepts and research already done by NASA and its partners.)
But the official announcement, and the implication that it is the new generation of space companies that will accomplish ambitious goals like a there-and-back trip to Mars, must be very validating.
Whatever that new plan may be, it will almost certainly rely far more than before on commercial services and hardware.
Design firm Zypsy will do $100,000 worth of work for 1% equity for early-stage startupsZypsy, a design firm with a track record of helping early-stage startups, has launched a new and somewhat unique venture investment program.
Instead startups will pay by issuing Zypsy 1% equity of their companies via a SAFE (Simple Agreement for Future Equity).
Zypsy has already added five startups to the first cohort of the design capital program (alphabetical order):Pilot projects with over 25 startups for three yearsThe six-year-old design company has worked with more than 25 startups.
“They are ‘cash-based clients, not an ‘equity-based portfolios’ like five companies we mentioned in the first design capital program,” he said.
In 2023, Zypsy raised $3 million to establish Design Capital.
For the firm that calls itself “the first check in deep tech,” the last check for SOSV’s latest $306 million fund took a bit longer than founder Sean O’Sullivan would have liked.
“We’re concentrating and double doubling down on deep tech,” O’Sullivan said.
We’re doing a fewer number of companies, more like 80 deep tech companies per year.
O’Sullivan said that SOSV intends to invest about 70% of the funds in climate tech companies, 25% in health tech, and the remaining 5% will be reserved for opportunistic investments.
“We have a special place to serve because we do deep tech, because we do get into the biology, we do get into the chemistry, the physics and the electronics.
When Alex Katz founded Two Chairs in 2017, he firmly believed that in-person therapy is the most effective for behavioral health.
On Tuesday, the company announced a $72 million Series C equity and debt financing led by Amplo and Fifth Down Capital, bringing Two Chairs total funding to $103 million.
Amplo also led the company’s $22.5 million Series B in August 2019.
Two Chairs is one of the latest therapy startups to raise substantial funding rounds.
Last week, Grow Therapy, a three-sided mental health platform for therapists, payers and patients, raised an $88 million Series C round led by Sequoia.
And more AI companies are receiving investments than ever before, with 1,812 AI startups announcing funding in 2023, up 40.6% versus 2022, according to the Stanford HAI report.
“There’s been a more deliberate approach by investors in evaluating AI investments compared to a year ago.
According to a PitchBook report compiled for TechCrunch, VCs invested $25.87 billion globally in AI startups in Q1 2024, up from $21.69 billion in Q1 2023.
Despite the general malaise within AI investor circles, generative AI — AI that creates new content, such as text, images, music and videos — remains a bright spot.
“We’ll soon be evaluating whether generative AI delivers the promised efficiency gains at scale and drives top-line growth through AI-integrated products and services,” Kumar said.
The startup charges a listing fee (subscription fee) to publish jobs on the platform and a success fee when a hire is made.
“The listing fee ensures buy-in from startups to the two-way marketplace and a commitment to the recruiters they’re working with,” Kim said.
In addition to early- and late-stage startups, Kim said the platform also works with larger in-house talent teams to fill challenging roles.
“More than 50% of our customers have great in-house talent teams, but they continue to post roles on Paraform.
“We’re already branching out into research, science, manufacturing and defense roles due to the demand we’re seeing from potential customers,” Kim said.
