Amazon developing its own AI ‘reasoning’ model & Judge rejects Musk’s attempt to block OpenAI’s for-profit transition.

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• Angel Investor Josh Payne on 10 red flags he looks for.

• Dealroom’s report highlights the rise of value-add investors.

• Activant Capital explores why vertical software startups are thriving and what it means for investors.

• Product stickiness framework: Triggers, Constraints, and Rituals.

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STARTUPS RAISING MILLIONS

💰 Startup funding updates

Uniti AI, a NYC-based company providing an AI agent platform for commercial real estate operators, raised $4M in Seed funding. The round was led by Prudence, with participation from Alate Partners, Flex Capital, Observer Capital, and RE Angels.

Whisper, a NYC-based company developing AI-driven sales and behavioral cloning technology for content creators, raised $1M in funding. Backers included AngelList Early Stage Quant Fund and a consortium of high-net-worth content creators.

LlamaIndex, a San Francisco, CA-based provider of an agent development platform for automating knowledge work over unstructured enterprise data, raised $19M in Series A funding. The round was led by Norwest Venture Partners with participation from existing investor Greylock.

Tandem PV, a San Jose, CA-based American perovskite solar technology company, raised $50M in Series A funding. The round was led by Eclipse, with participation from Constellation Energy, Planetary Technologies, Uncorrelated Ventures, Trellis Climate, Tom Werner, Stifel Bank, CSC Leasing, and other existing and new investors.

Aescape, a NYC-based lifestyle robotics company providing AI massage for personalized recovery, raised $83M in funding. The round, which brought the total amount to $128M, was led by Valor Equity Partners with participation from existing investors, including Alumni Ventures, and NBA Champion and All-Star Kevin Love.

Lenkie, a London, UK-based provider of a cashflow management platform, raised ‘49M in Series A funding. The round, which included £4M in equity and a £45M debt facility, was led by a US private credit fund focussed on supporting lenders internationally.

Hands In, a London, UK-based fintech company which specializes in split payment solutions, raised over £1M in funding. Backers included backing from fintech angel investors, including Ryta Zasiekina.

NapTapGo, a New Delhi, India-based capsule hotel startup, raised $500K in Pre-Seed funding from T9L Qube.

PassEntry, a London, UK-based digital pass issuance startup, closed a £5.2M funding round. The round was led by Acurio Ventures and Bonsai Partners.

Duetti, a NYC-based music financing and catalog services company, received $200M in debt financing. The round consisted of two new credit facilities: a $150M bank facility led by Truist Securities Inc., with participation from Truist Bank, alongside City National Bank and Regions Bank as Joint Lead Arrangers; and a $50M side facility from Viola Credit.

Copley Software, a Boston, MA-based AI-powered content experimentation and optimization startup, raised $4.8M in funding. The round was led by Asymmetric Capital Partners and Underscore VC with participation from angel investors including Andrew Bialecki and Ed Hallen, Co-founders of Klaviyo, Jeff Barnett and Tom Ebling, former CEOs of Salesforce Commerce Cloud and Demandware, as well as other Klaviyo, Salesforce, and Boston-area tech executives.

Garuda Therapeutics, a Cambridge, MA-based hematopoietic stem cell (HSC) therapies company, raised $50M in Series A-1 funding. Backers included OrbiMed, Northpond Ventures, Cormorant Asset Management, Kyowa Kirin Co., Ltd., a Japan-based Global Specialty Pharmaceutical Company.

Odeko, a NYC-based operation and technology partner for local coffee shops, cafes, and other food and beverage businesses, raised $126M in Series E funding. The round consisted of $96M in equity led by B Capital and a $30M credit facility from Banc of California.

Nervonik, a Los Angeles, CA-based provider of a medical device company developing an opioid-free peripheral nerve stimulation (PNS) system, raised $13M in Series A funding. The round was led by U.S. Venture Partners (USVP), with participation from Foothill Ventures, Correlation Ventures, and other investors.

Swap, a NYC-based e-commerce operating system (OS) company, raised $40M in Series B funding. The round was led by ICONIQ Growth, with participation from prior lead investors Cherry Ventures, QED Investors, and 9900 Capital.

GEM HEALTH, a Minneapolis, MN-based virtual specialty care company which specializes in sleep care, raised $7M in Series A funding. The round was led by HealthTrend Capital and LFE Capital, with participation from existing investors Base10 Partners and Mairs & Power Venture Capital. 

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NEW VCs IN THE MARKET

🏦 Venture Capital updates

Funding to women-founded startups declined 12% in 2024:

• Women-led startups in Europe saw a 12% drop in VC funding in 2024, nearly matching the overall 11% decline.

• Deep tech startups founded by women raised more on average than male-led counterparts, with synthetic biology, generative AI, and drug development leading the charge.

• Seed-stage rounds for women-founded startups grew 7% year-over-year, while the U.K., France, and Germany attracted the most female-founder VC funding.

Foundation Capital, a Palo Alto, CA-based venture firm, closed a $600M Fund XI, 20% larger than its previous $500M fund. The firm remains focused on seed-stage investments in AI, fintech, enterprise, and crypto, with past bets on Cerebras and Solana. The raise follows $1.4B in LP distributions over the last three years, driven by exits like EvolutionIQ ($730M) and Venafi ($1.5B).

LoftyInc Capital, a Lagos-based venture firm, closed a $43M first close for its third fund, LoftyInc Alpha, targeting late-seed and Series A startups in Africa. The round saw participation from Egypt’s MSMEDA, Tunisia’s Anava Fund of Funds, FMO, Proparco, IFC, First Close Partners, and European family offices. The fund will focus on fintech, logistics, health tech, retail, climate, and deep tech across Nigeria, Egypt, Kenya, and Francophone Africa.

KEY STORIES IN TECH

📜 Latest in tech

Apple launches a new iPad Air with M3 chip:

• Apple introduces 11-inch and 13-inch iPad Air with M3 chip, available for preorder today and launching March 12.

• Prices start at $599 for 11-inch and $799 for 13-inch, with up to 1TB storage options.

• New Magic Keyboard features larger trackpad, 14-key function row, and machined aluminum hinge, starting at $269.

• Apple claims 2x faster performance vs. M1 iPad Air, 60% Neural Engine boost, and up to 3.5x speed increase over A14 Bionic.

Ex-OpenAI researcher Alec Radford subpoenaed in copyright case:

• Alec Radford, key AI researcher behind OpenAI’s GPT models, subpoenaed in authors’ copyright lawsuit.

• Case alleges OpenAI infringed copyrights by training AI on books without permission, with claims of direct infringement moving forward.

• Other ex-OpenAI figures, including Anthropic CEO Dario Amodei, also ordered to testify.

Amazon reportedly forms a new agentic AI group:

• AWS CEO Matt Garman calls AI agents a "multi-billion dollar opportunity," forming a new division led by Swami Sivasubramanian.

• Move follows Amazon’s Alexa+ demo, showcasing AI-driven automation for booking rides, navigating websites, and more.

• AWS may also target enterprise AI agents, competing with Microsoft and Salesforce in workplace automation.

Judge rejects Musk’s attempt to block OpenAI’s for-profit transition:

• Federal judge Yvonne Gonzalez Rogers rejected Elon Musk’s injunction bid, citing lack of evidence but allowing an expedited trial on OpenAI’s conversion.

• Musk’s lawsuit claims OpenAI abandoned its nonprofit mission, while his $97.4B takeover bid was unanimously rejected by OpenAI’s board.

• The ruling adds legal uncertainty as OpenAI moves toward a more traditional corporate structure.

Amazon is reportedly developing its own AI ‘reasoning’ model:

• Amazon is working on an AI reasoning model similar to OpenAI’s o3-mini and DeepSeek’s R1, set to launch as early as June under its Nova brand.

• The model will reportedly adopt a "hybrid" reasoning approach, akin to Anthropic’s Claude 3.7 Sonnet, combining quick responses with deeper reasoning.

• Amazon also aims for cost efficiency, though competing with DeepSeek’s aggressively low pricing may prove challenging.

People are using Super Mario to benchmark AI now:

• Researchers from Hao AI Lab at the University of California San Diego tested AI models on Super Mario Bros., with Anthropic’s Claude 3.7 outperforming other models like Google’s Gemini 1.5 Pro and OpenAI’s GPT-4o.

• The game used was modified to run in an emulator with a framework called GamingAgent, which allowed the AI to control Mario by generating Python code based on instructions and in-game screenshots.

• Reasoning models struggled with real-time gameplay due to their slower decision-making process, highlighting challenges in using games as effective benchmarks for evaluating AI capabilities.

LAST COFFEE SIP

☕Other news

From $2B IPO to fraud charges: Aspiration Co-Founder arrested:

• Aspiration co-founder Joseph Sanberg was arrested for allegedly conspiring to defraud investors of $145 million; board member Ibrahim AlHusseini pleaded guilty to wire fraud.

• Prosecutors say fake brokerage and bank statements were used to secure two large loans, with AlHusseini falsely posing as a backer; one investor fund lost at least $145M.

• Aspiration’s high-profile investors include Leonardo DiCaprio, Orlando Bloom, and Drake. The climate fintech scrapped its $2B SPAC deal in 2023 amid financial scrutiny.

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• VC Senior Analyst - Toyota Venture | USA - Apply Here

• Venture Capital Associate - Connecticut Innovation | USA - Apply Here

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