a16z, Sequoia Capital Backed Founder Charged With Fraud & Musk's xAI Acquiring Character AI Startup?

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☕Hey there, Welcome to today's quick rundown in the Venture Daily Digest Newsletter. We've got the scoop on startup fundraising, VC funds, and some cool tech – all in just 5 minutes!

Top News

BitClout founder Nader Al-Naji, known as "DiamondHands," has been charged by the SEC with fraud and unregistered offering of securities. The SEC alleges Al-Naji raised over $257 million in cryptocurrency while using a pseudonym to avoid regulatory scrutiny, and spent $7 million on personal expenses. BitClout, a decentralized social media platform, was backed by major investors like a16z, Sequoia, and Coinbase Ventures. The company faced controversy from its launch in 2021 for creating a "stock market" of celebrity tokens without consent, leading to public backlash and legal challenges.

The SEC has charged Abraham Shafi, founder of IRL, with fraud for misrepresenting user growth and misusing company funds. IRL, once valued at $1.17 billion, shut down in 2023 after revealing 95% of its users were bots.

Other Major News

• Over 100 VCs, have pledged support for Vice President Kamala Harris under VCs for Kamala. (Scroll To VC Updates)

• Ex-twitter media head launch $95 Million VC fund. (Scroll To VC Updates)

• Google has released three new "open" generative AI models—Gemma 2 2B, ShieldGemma, and Gemma Scope. (Scroll To Tech Updates)

• How To Raise Money? Advice From a Founder Who Raised $1 Billion For Startups. (Scroll To Featured Article)

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Startup Funding Updates

Sybill, U.S based startup, has developed an AI assistant for sales representatives that automates tasks like call summaries, follow-up emails, and CRM updates. The company has raised $11 million in a Series A round led by Greycroft, bringing its total funding to $14.5 million. Other investors include Neotribe Ventures, Powerhouse Ventures, and Uncorrelated Ventures. More Here

Not Diamond, a San Francisco, CA-based product that gives developers the ability to intelligently route AI queries to the best-suited models, raised $2.3M in funding. The round was led by defy.vc with participation from the world’s leading AI scientists, engineers, and executives including Jeff Dean (Google), Julien Chaumond (Hugging Face), Zack Kass (OpenAI), Ion Stoica (Anyscale, Databricks), Tom Preston-Werner (Github), Scott Belsky (Adobe), Jeff Weiner (LinkedIn), and many more. More Here

Lineaje, a U.S.-based startup (exact location not specified), develops tools to detect and mitigate software supply chain attacks and vulnerabilities. The company has raised $20 million in a Series A round, bringing its total funding to $27 million. The round was co-led by Prosperity7 Ventures, Neotribe, and Hitachi, with participation from Tenable Ventures, Carahsoft, Wipro Ventures, SecureOctane, and AlumniVentures. More Here

Ema, a San Francisco, CA-based generative AI company creating the universal employee of the future, added $36M to its Series A funding which now totals $50M. The round was led by Accel and Section 32 with participation from Prosus Ventures, Sozo Ventures, Hitachi Ventures, Wipro Ventures, SCB 10X, Colle Capital and Frontier Ventures. More Here

Tezi, a startup based in the U.S. (exact location not specified), is developing an AI agent to automate HR recruiting processes, including resume screening and interview scheduling. The company has raised $9 million in seed funding, led by 8VC and Audacious Ventures, with participation from Liquid 2, Afore, PrimeSet, South Park Commons, and industry angels. More Here

Graphyte, a Pine Bluff, Arkansas-based leader in the durable carbon removal industry, closed a $30m Series A funding round. The round was co-led by Prelude Ventures and Carbon Direct Capital, with participation from existing investors Breakthrough Energy Ventures (BEV) and Overture. More Here

Leaf, a NYC-based unified farm data API and farm data processing platform, closed a $11.3m Series A funding. The round was led by with participation from all existing investors. More Here

Watermelon Ecosystem, a Dubai, UAE-based tech startup innovating the F&B industry, closed its $4m Series A funding round at a post-money valuation of $29m. More Here

Icebreaker, a NYC-based open professional network, raised $5m in seed funding. The round was led by CoinFund, with participation from Accomplice, Anagram, Legion Capital, and more than 30 founder angels. More Here

Gloo, a Boulder, CO-based technology platform dedicated to connecting the faith ecosystem and releasing its collective might, closed a $110m financing. More Here

Layer2 Financial, a Toronto, Canada-based regulated payments infrastructure transforming cross-border payments, raised $10.7m in Series A funding round. This round was led by Galaxy Ventures, with key participation from Accomplice. More Here

FleetPulse, a Chicago, IL-based innovator in trailer telematics, received an additional funding of undisclosed amount. Backers included NFI Ventures, a venture capital group run by NFI, a prominent 3PL, and Ironspring Ventures. More Here

Spring Health, a NYC-based global mental health solution for employers and health plans, raised $100m in Series E funding round with a valuation of $3.3 billion. Generation Investment Management led the round with participation from existing investors, including Kinnevik, William K Warren Foundation, RRE and Northzone. More Here

Noze, a Montreal, Canada-based leader in breath-based diagnostics, secured a $5m equity investment from the Bill & Melinda Gates Foundation. The funding follows two previous grants from the foundation, bringing its total contribution to $6.8m. More Here

Applied Carbon, a Houston, TX-based technology company designing automated biochar production machines that convert in-field agricultural crop waste into biochar, raised a $21.5m in Series A funding. The round was led by TO VC, with participation from Congruent Ventures, Grantham Foundation, Microsoft Climate Innovation Fund, S2G Ventures, Overture.vc, Wireframe Ventures. More Here

Endari, a San Francisco, CA-based cybersecurity company, raised $4M in seed funding. The backers were not disclosed. More Here

Checkly, a Berlin, Germany-based provider of synthetic monitoring powered by Monitoring as Code (MaC) and Playwright, raised $20m in Series B funding. The round, which brought total funding to $32.25M, was led by Balderton Capital with participation from existing investors Accel, CRV, and Paul H. Müller. Balderton Capital Partner Colin Hanna joined Checkly’s board of directors. More Here

WorkJam, a Montreal, Canada-based digital frontline workplace, received a $20m investment from Export Development Canada (EDC). More Here

Airna, a Cambridge, MA-based biotech company advancing RNA editing therapeutics to restore the health of patients with rare and common diseases, closed a $60m financing round. The financing, which brought the total Series A funding to $90m, was led by Forbion with participation from Ono Venture Investment, Alexandria Venture Investments, and other new investors, as well as AIRNA’s existing syndicate, including ARCH Venture Partners and ND Capital. More Here

iotaSciences, an Oxford, UK-based leader in single-cell biology handling solutions, raised an equity funding round of undisclosed amount. Backers included Oxford Science Enterprises, and the Oxford Innovation EIS Growth Fund managed by Oxford Innovation Finance. More Here

Matereal, a Denver, CO-based plastic replacements technology company, closed a $4.5m seed funding round. The round was led by the Collaborative Fund with participation from Better Ventures, Alante Capital, One Small Planet, Climate Capital, Sandy Spring Climate Partners, Pachamama Ventures and PDS Ventures. More Here

Gigpro, a Charleston, SC-based on-demand labor marketplace for the hospitality industry, closed a $16m Series A funding round. The round was led by Foundry, with participation from Stage 1 Ventures and existing investors Stage 2 Capital and Detroit Venture Partners. More Here

Rhombus, a Sacramento, CA-based leader in cloud-managed physical security, raised $45m in Series C funding. The round, which brought total funding raised to over $90m, was led by NightDragon, with participation from Bluestone Equity Partners, and existing investors Caden Capital, Cota Capital, Tru Arrow Partners, and Uncorrelated Ventures. More Here

FranShares, a Chicago, IL-based provider of a platform for franchise investing, raised $4.1M in seed funding. The round, which brought brings total capital raised to date to $5.76M, was led by Chicago Ventures. More Here

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Venture Capital Updates

Moxxie Ventures, founded by Katie Jacobs Stanton ex-twitter media head, closed a $95 million third fund, surpassing its $85 million target. Despite a challenging fundraising environment, Moxxie, which invests in pre-seed and seed startups, secured strong LP support, including Cendana Capital and Accolade Partners. The firm focuses on underrepresented founders, with about a third of its portfolio companies led by female founders and half by BIPOC. More Here

Over 100 VCs, including Reid Hoffman and Vinod Khosla, have pledged support for Vice President Kamala Harris in the upcoming U.S. presidential election through the group VCsForKamala. They emphasize commitment to "strong, trustworthy institutions" and are seeking donations for Harris' campaign. This effort counters Silicon Valley's perceived support for former President Trump, endorsed by tech figures like Elon Musk and Marc Andreessen.

Kennet VI, based in London, has raised €266 million to support established B2B SaaS startups across Europe. The fund focuses on capital-efficient or bootstrapped companies, exemplified by investments like Grip. Kennet VI follows successful exits, such as Eloomi and Nuxeo, and involves cornerstone investor Edmond de Rothschild Private Equity.

Featured Article

How To Raise Money? Advice From a Founder Who Raised $1 Billion For Startups

The probability of success for a high-growth company is predicated on your ability to raise capital. As a leader, you will never achieve your maximum entrepreneurial potential without being able to raise capital quickly and successfully.

Capital is the lifeblood of any high-growth company. It has to be treated as a key priority. It can never be outsourced or downgraded to a second priority. 

Brett Adcock, the founder and CEO of Figure AI, secured $70 million in its Series A funding round in 2023. Also his previous ventures, Adcock has successfully raised significant capital: Vettery was acquired for $110 million, Archer Aviation went public with a valuation of $2.7 billion and raised over $1 billion. He shared the framework for founders to raise capital. So read along -

“Remember - Investors are looking for certain traits. Without these, you have little chance of raising a single dollar. Let's talk about how you can use the formula to build a repeatable process for raising capital.

Fundraising Formula:

We haves shared in detailed writeup in our Venture Curator newsletter, Check out here…

Startup’s Latest Buzz

Acquisition & Going Public

Fiverr announced its acquisition of AutoDS, a Denver, Colorado-based provider of a subscription-based end-to-end solution for dropshippers, including product research and sourcing, inventory management, and automated fulfillment.

Airtable has acquired Dopt, a startup specializing in product onboarding experiences, primarily for its AI-based assistance tools and talent. The Dopt team will join Airtable's AI group, focusing on developing new AI capabilities and user experiences.

Layoffs & Bankruptcy

Startups & People

Alex Cook, a partner at Tiger Global known for overseeing major fintech and India deals, is leaving the firm after nearly seven years. His departure follows other high-profile exits, including Scott Shleifer and John Curtius, amid a challenging fundraising climate for the venture industry. Tiger Global recently raised $2.2 billion for its latest VC fund, the smallest in a decade.

Elon Musk stated on Wednesday that his AI startup xAI is not considering acquiring chatbot startup Character.AI, contradicting an earlier report by The Information.

Latest In Emerging Tech

Google has released three new "open" generative AI models—Gemma 2 2B, ShieldGemma, and Gemma Scope—claimed to be "safer," "smaller," and "more transparent" than most. These additions to the Gemma 2 family, designed for various applications, emphasize safety and are available on platforms like Vertex AI and Kaggle. This release aligns with the U.S. Commerce Department's recent endorsement of open AI models to enhance accessibility and monitor potential risks.

German robotics manufacturer Neura released a video of its humanoid robot, 4NE-1, 

performing tasks like ironing and moving boxes, coinciding with Nvidia's showcase of new humanoid tools at the Siggraph conference. Neura, among early access firms to Nvidia's tools, aims to advance humanoid robotics using Nvidia's computing power and simulation platforms. The video highlights 4NE-1's capabilities, though real-world, repeatable performance remains to be seen.

Meta Platforms has agreed to pay $1.4 billion to Texas to settle a lawsuit accusing it of illegally collecting biometric data using facial-recognition technology without consent. This is the largest settlement by a single state, stemming from the use of Facebook's discontinued "Tag Suggestions" feature. Meta, which denies wrongdoing, aims to explore future business investments in Texas.

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