Meta asks California to block OpenAI’s conversion to for-profit & Apple Intelligence generates false BBC headline.

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FAVORITE FINDS OF THE WEEK

Venture Daily Digest Picks

•  How much time should founders typically allocate to fundraising, from Elizabeth Yin (Hustle Fund Cofounder)? (Read)

• How many hours do Y Combinator founders work? A poll from YC’s internal forum. (Read)

• Why LTV Matters More in 2024 by Tomasz Tunguz. (Read)

• 8 lead generation pillars and 24 tools For Startup Founders. (Read)

• Duolingo on how to win with gamified design. (Read)

• Sam Altman - ‘Don't Run Toward Ideas Where There Is Oversupply of Founder Relative To Market Demand.’ (Read)

• The Best Time to Invest in a Company is When it Most Violates a Popular Narrative… (Read)

• Building a VC fund is harder than you think - Wischoff Fund Journey (Read)

• The playbook teams are using to crush viral app growth (Link)

STARTUPS RAISING MILLIONS

Startup Funding Updates

Cartesia, a San Francisco, CA-based developer of real-time multimodal intelligence for every device, raised $22m in funding. The round, which brought total capital raised to $27m, was led by Index Ventures, with participation from A* Capital, Conviction, General Catalyst, Lightspeed, and SV Angel, along with 90 angel investors.

Terradot, a San Francisco, CA-based climate company, raised $58.2m in funding. The funding includes $4.2m in seed funding and a $54m Series A round, which recently closed. Backers included Lead, John Doerr; Sheryl Sandberg & Tom Bernthal, George Roberts; Strategics, Microsoft’s Climate Innovation Fund, Google, Cisco; and Floodgate, Kleiner Perkins, Acre Venture Partners, Gigascale Capital, Valor Capital, Ponderosa Ventures and others.

Ayan Capital, a London, UK-based Islamic fintech company, secured £2.8M in equity funding. The round was led by Cur8 Capital.

Zest AI, a Burbank, CA-based leader in AI lending technology, received a $200m growth investment from Insight Partners.

Lindis Blood Care, a Hennigsdorf, Germany-based medical device company, raised an undisclosed amount in funding. The round was eldby Brandenburg Kapital. High-Tech Gründerfonds, existing and new private investors as well as the founders, Dr. Franzpeter Bracht and Dr. Horst Lindhofer, also participated.

Haber, a Pune, India-based smart manufacturing startup, raised $44m in Series C funding round, which included $38m in equity and $6m in debt. The round was led by Creaegis, BEENEXT, and Accel.

Wordnerds, a Gateshead, UK-based business that uses AI to train computers to understand unstructured text, raised £1.6M in funding. The round consisted of £720K from two of Northstar Ventures’ funds, with £160K from the Northstar EIS Growth Fund and £560K from the North East Innovation Fund, supported by the European Regional Development Fund.

Get Well Soon, a UK-based healthcare startup committed to help patients access medical specialists and self-pay healthcare, raised £400K in funding. The round was led by Midven with participation from the Midlands Engine Investment Fund (MEIF).

Partful, a Manchester, UK-based manufacturing aftersales technology solution provider, raised £5M in Series A funding. The round was led by Northern Gritstone alongside Par Equity and Blumberg Capital.

BeamXR, a Newcastle Upon Tyne, UK-based creative tech company, raised £532k in funding. The round consisted of an equity investment from Creative UK’s North East Culture and Creative Investment Programme and equity raised from angel investors, plus a further £266K grant from Innovate UK.

Bpacks, a London, UK-based packaging technology company, raised €1M in Pre-Seed funding. Backers were not disclosed.

Alessa Therapeutics, a San Carlos, CA-based clinical-stage drug development company, raised $15M in Seed funding. The round was led by Mission BioCapital, with participation from Johnson & Johnson.

Baller League, a Berlin, Germany-based 6×6 football league, raised $33M+ in funding. The round, which followed an $8M round closed in Summer 2024, was led by EQT Ventures.

Archer Aviation, a San Jose, CA-based aviation technology company, raised additional $430M in additional equity capital. Backers included Stellantis, United Airlines, and new investors, including Wellington Management and Abu Dhabi investment holding company 2PointZero, a subsidiary of UAE’S largest listed entity, IHC.

bsport, a Barcelona, Spain-based provider of a technology platform for the boutique wellness industry, raised €30M in Series B funding. Backers included Base10 Partners (US) and Octopus Ventures (UK), alongside Stanford University and existing partners Seventure Partners and Seed4Soft.

Symmio, a Singapore-based provider of a decentralized derivatives protocol, raised $3.1M in funding. The round included $2.1M in new investments from top-tier investors including Spartan Group, Orbs, MCLB and Blockchain Founders Fund as well as previous investments by @AgentChud, MS2 Capital, Gametheorizing (Selini Capital), GMoney and Prime Ventures.

Vapi, a San Francisco, CA-based developer platform for deploying Voice AI agents, raised $20m in Series A funding. The round was led by Bessemer Venture Partners with participation from Abstract Ventures, AI Grant, Y Combinator, Saga Ventures, and Michael Ovitz.

Atlas Card, a NYC-based members-only concierge service and charge card provider focused on delivering access to coveted experiences through a seamless spending experience, raised $27M in Series B funding. The round was led by Michael Gilroy and Gokul Rajaram’s Marathon with participation from angel investors including Eric Schmidt, Olaf Carlson-Wee, and Anton Levy.

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NEW VCs IN THE MARKET

Venture Capital Updates

Arlan Hamilton, founder of Backstage Capital, is transitioning from managing partner to a chairperson and advisory role after 12 years, while the firm enters a strategic partnership with 360 Venture Collective that includes launching a $200 million fund in 2025. This move comes after recent challenges at Backstage Capital, which has invested in over 200 companies but faced difficulties including team downsizing in 2022 and broader challenges in securing funding for diverse founders.

G2 Venture Partners, which spun out of Kleiner Perkins Caufield & Byers, is raising its third fund with a target of $750 million, representing a significant increase from its previous $500 million fund closed in 2021. The firm, known for investing in climate and sustainability startups like Arcadia, 1Komma5, and Crusoe, seems optimistic about the sector's future despite potential concerns about the incoming Trump administration's impact on climate-focused companies.

KEY STORIES IN TECH

Latest In Tech

Meta has joined Elon Musk's legal effort against OpenAI's transition from non-profit to for-profit status by sending a letter to California's Attorney General, arguing that such a shift would significantly impact Silicon Valley and potentially create unfair advantages through tax benefits. Meta, which competes with OpenAI in the AI market, supports Musk (who co-founded OpenAI before leaving to start xAI) and former OpenAI board member Shivon Zilis in their lawsuit seeking to block this transition. In response, OpenAI has published communications from Musk, suggesting he should focus on market competition rather than legal battles.

OpenAI refutes Elon Musk's lawsuit that opposes its for-profit shift, citing his earlier support for this change, as detailed in a recent blog post and legal document. Founding member Elon Musk left OpenAI in 2018 after unsuccessful attempts to merge it with Tesla, later founding a rival company, xAI, in March 2023. OpenAI asserts that Musk had considered a for-profit framework since 2015, but he attempted legal action against this shift, despite receiving prior offerings of equity in the new entity.

LAST COFFEE SIP

Other News

Donald Trump's Silicon Valley advisers, including Elon Musk, Marc Andreessen, and David Sacks, are raising concerns about potential AI "censorship" by Big Tech companies, viewing AI chatbots as a greater threat to free speech than social media censorship. These advisers, who are influential in shaping Trump's technology policies, have been particularly critical of companies like Google and OpenAI for allegedly programming their AI chatbots with political biases, with Musk launching xAI and Grok as alternatives, while also taking legal action against OpenAI.

The BBC has raised concerns with Apple after an AI-powered feature on iPhones falsely suggested they reported a murder suspect had committed suicide, which was incorrect. Apple Intelligence, designed to condense notifications using artificial intelligence, mishandled headlines not only for the BBC but also other media outlets like the New York Times. Critics argue that while Apple's AI notifications aim to reduce distractions, the current technology can spread misinformation, as seen with some misleading article summaries on iPhones and other devices.

The House Committee has instructed Apple and Google to prepare for the possibility of removing TikTok from their app stores, following a U.S. Court of Appeals decision requiring ByteDance to divest the app by January 19. House Representatives John Moolenaar and Raja Krishnamoorthi have communicated with Tim Cook and Sundar Pichai, stressing their obligations as app marketplace operators regarding the TikTok app if a divestiture does not occur. TikTok disputes the law as unconstitutional and has filed for an injunction, citing significant financial losses for U.S. businesses, while a decision awaits from the U.S. Supreme Court on this matter.

REPORT THAT YOU SHOULD LOOK

In-Depth Insights

• Small But Mighty: AI Startups Thriving Tom Tunguz highlights how smaller AI startups are making big waves in the tech ecosystem, outpacing larger players in innovation and agility.

• Why Ownership Matters to VCs Chris Neumann explains the importance of ownership stakes in the venture capital world and how it influences decision-making.

• AI and Startup Trends for 2025 CB Insights provides a deep dive into trends shaping AI and startups in 2025, emphasizing growth areas and innovation.

• You're Not the Same Fund Manager You Used to Be Hunter Walk delves into how evolving market dynamics challenge fund managers to rethink strategies and adapt.

• Framework To Find Problem-Solution Fit. We have shared a simple framework that can help founders to find Problem-Solution fit.

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• Head of TS Bridge - Turbostart | India - Apply Here

• Partner 18, Deal Operations - a16z | USA - Apply Here

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