China Raises $48 Billion For Semiconductor Fund & Musk's AI Startup Raised $6 Billion From a16z

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👋 Hey, Sahil here! Welcome to today's quick rundown in the Venture Daily Digest Newsletter. I've got the scoop on startup fundraising, fresh VC funds, and some cool tech – all in just 5 minutes ☕! Today’s major updates include -

• Elon Musk's AI startup xAI has raised a massive $6 billion from investors like Andreessen Horowitz, Sequoia and Saudi's Prince Alwaleed, valuing it at $24 billion post-money.

• Pixar Animation Studios laid off 14% of its workforce, around 175 employees out of 1,300, in the largest downsizing in its history.

• Elon Musk plans to build an AI supercomputer called the "Gigafactory of Compute" for his company xAI which could cost $100 Billion.

• China has set up a new state-backed investment fund with registered capital of 344 billion yuan ($47.5 billion) to boost the country's semiconductor industry.

• Featured Article : Track LTV & CACD, Not LTV/CAC Ratio - Here's Why?

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STARTUP FUNDING UPDATES

Elon Musk's AI startup xAI has raised a massive $6 billion in Series B funding from investors like Andreessen Horowitz, Sequoia and Saudi's Prince Alwaleed, valuing it at $24 billion post-money. 

The funds will fuel xAI's efforts to take its AI models like Grok to market and compete with rivals like OpenAI, while Musk's social network X also has a stake in the startup. More Here

Rain AI, a San Francisco, California-based AI chip startup, raised $8.1m in Series A Extension round. Epic Venture Partners made the investment. More Here

Doly, a French startup based in Paris, allows users to generate 3D product videos from their iPhones. It has raised $2 million in seed funding led by Adjacent, with participation from AI Grant, Kima Ventures, and several angel investors, including Julien Chaumond from Hugging Face and Nicolas Steegman. More Here

Spectrum.Life, a London, UK and Dublin, Ireland-based company delivering clinically backed digital health, mental health and wellbeing solutions, raised €17M in funding. The round was led by Act Venture Capital with participation from existing investors. More Here

OneOrder, a Cairo, Egypt-based logistics startup, raised $16m in Series A funding. The round was led by Delivery Hero Ventures, with participation from Norrsken22, as well as Nclude and A15. More Here

HoneyNaps, a Seoul, South Korea-based company which specializes in artificial intelligence (AI) sleep data analysis, raised $11.6M in funding. Backers included Korea Industrial Bank, Hi investment Partners and QUAD Investment Management. More Here

VENTURE CAPITAL UPDATES

Harlem Capital, based in the U.S., is raising a $150 million fund to back diverse founders. The firm, founded in 2015, has $174 million in assets and previously raised $134 million in 2021. Notable investments include Propense.ai, Poolit, and Gander. More Here

FEATURED ARTICLE

Track LTV & CACD, Not LTV/CAC Ratio - Here's Why?

For a business to be viable and sustainable, the cost of acquiring a new customer (Customer Acquisition Cost/CAC) should be lower than the total value that customer generates over their lifetime (Lifetime Value / LTV).

Startups often fail because their CAC exceeds LTV. Investors obsess over the LTV/CAC ratio as it represents potential ROI.

However, looking at the overall LTV/CAC provides limited insights. Businesses should analyze LTV/CAC by customer cohort since not all customers are equal in lifetime value. Tracking cohort-level LTV/CAC allows optimizing acquisition efforts towards high-value customers.

However, focusing solely on the LTV/CAC ratio is not enough. The speed at which the Customer Acquisition Cost (CAC) is recovered through the Lifetime Value (LTV) is equally crucial, an aspect that many startups fail to analyze properly.

The Customer Acquisition Cost Doubled (CACD) metric measures how long it takes to double the CAC through LTV.

A shorter CACD, ideally less than 8 months, indicates a faster return on the acquisition investment and is desirable for accelerating growth. Businesses should aim for a high LTV/CAC ratio while simultaneously optimizing for a rapid CACD to ensure a sustainable and scalable growth.

We have shared in detailed writeup here, check it out.

STARTUP’S LATEST BUZZ

ACQUISITION & GOING PUBLIC

FileCloud, an Austin, TX-based company which specializes in content governance and collaboration for unstructured data, acquired Signority, a Kanata, ON, Canada-based provider of an e-Signature and document workflow platform. More Here

LeadsOnline, a Plano, TX-based provider of data, technology, and intelligence tools for law enforcement agencies, acquired Nighthawk.Cloud, an Englewood, Colorado-based company which specializes in investigative data visualization and analysis. More Here

Axis Insurance Managers, a Vancouver, BC, Canada-based company providing strategic advice and solutions for businesses and personal risks, acquired The Magnes Group Inc., an independent insurance brokerage. More Here

LAYOFFS & BANKRUPTCY

Pixar Animation Studios laid off 14% of its workforce, around 175 employees out of 1,300, in the largest downsizing in its history. The layoffs were expected but less severe than prior estimates of 20% job cuts, as Pixar shifts strategy under Disney's new leadership. More Here

TikTok is planning major layoffs across its operations, marketing, user support, and communications teams, impacting a large percentage of its roughly 1,000 employees in those divisions. The cuts come as a surprise since TikTok rarely does large-scale layoffs, and just weeks after a new U.S. law opened the door to potentially banning the app. More Here

STARTUPS & PEOPLE

Former OpenAI board members Helen Toner and Tasha McCauley say they played key roles in firing CEO Sam Altman last November due to concerns over his weakening of board oversight and creating a "toxic culture of lying." They believe OpenAI's mix of nonprofit and for-profit structures has failed at self-regulation, necessitating greater regulatory involvement. Toner and McCauley also dispute OpenAI's internal review clearing Altman and take issue with recent events like his return as CEO. More Here

LATEST IN EMERGING TECH

Elon Musk plans to build an AI supercomputer called the "Gigafactory of Compute" for his company xAI, using Nvidia H100 GPUs and aiming to be 4 times larger than competitors' systems by fall 2025. Musk is partnering with Oracle and prioritized by Nvidia for the project, which comes after xAI's $6 billion funding round. Rivals Microsoft and OpenAI are also building supercomputers like "Stargate" costing up to $100 billion to advance AI research. More Here

China has set up a new state-backed investment fund with registered capital of 344 billion yuan ($47.5 billion) to boost the country's semiconductor industry. More Here

Amazon's cloud computing unit AWS is in talks with Italy to invest billions of euros to expand its data center footprint in the country. Discussions are ongoing regarding the size and location of the new investment. AWS previously announced plans to invest 2 billion euros in Italy by 2029 when it launched its first cloud region there in 2020. More Here

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HOW’S TODAY’S COFFEE ?

That’s It For Today! Will Meet You Tomorrow. Happy Tuesday!☕

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