Venture Daily Digest
Posts
OpenAI May Lose $5 billion This Year & Could Run Out of Cash

OpenAI May Lose $5 billion This Year & Could Run Out of Cash

Venture Daily Digest - 25/07/2024

Venture Daily Digest
July 25, 2024

☕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

OpenAI may lose $5 billion this year and could run out of cash in 12 months unless they raise additional capital from VCs. The world's most valuable AI startup. OpenAI reportedly burned $4 billion this year already on cloud costs alone and may spend another $3 billion+ on model training, as per The Information. Meanwhile, their annualized revenue is around $3.4B. They simply can't survive. But that's not even the worst part….

Given that Zuck's Meta just released their open-source Llama 3.1 model - giving you GPT-4 performance practically for free, not to mention the ability to train smaller, more specialized models yourself - it's no longer clear whether Sam Altman's Al startup has any moat.

Other Major News

Venture Curator Hub: Download Early Stage Startup Financial Model Template For Fundraising , 10000+ Investor database. (Scroll Down)
Apple could launch a foldable iPhone in 2026 (Scroll To Tech News)
Mistral released its new flagship AI model, Large 2, with 123 billion parameters, claiming performance on par with top models from OpenAI and Meta (Scroll To Tech News)
Marc Andreessen: When The VCs Say “No”.. (Scroll To Featured Article)

From Our Partner Dharmesh Shah (Hubspot’s CTO)

Discover AI's Magic: Simplified for All by Dharmesh Shah, HubSpot's Co-founder & CTO

Explore the wonders of AI with Dharmesh Shah, HubSpot's Co-founder & CTO, as he simplifies complex AI concepts into easy-to-grasp insights.

→ Get ready to uncover the magic of AI with Simple AI!

Partnership With Us

Want to get your brand in front of 50,000+ founders, investors, executives, and startup operators? For details on our sponsorships, fill up this quick form or reply to this email as “Advertise” and we’ll get in touch.

Startup Funding Updates

Vanta, a San Francisco, CA-based provider of a trust management platform, raised $150M in Series C funding, at $2.45 Billion valuation. The round, which brought the total amount to $353M, was led by Sequoia Capital, in addition to new investors Growth Equity at Goldman Sachs Alternatives, J.P. Morgan and existing investors Atlassian Ventures, Craft Ventures, CrowdStrike Ventures, HubSpot Ventures, Workday Ventures and Y Combinator. More Here

Reworkd, a San Francisco-based startup, builds AI agents for web scraping to extract structured data from public websites. The company has raised $4 million in total funding, with investors including Paul Graham, AI Grant (Nat Friedman and Daniel Gross), SV Angel, General Catalyst, and Panache Ventures. More Here

Colin Kaepernick, former NFL quarterback, is launching Lumi, an AI storytelling platform based in Silicon Valley. Lumi aims to help creators tell and own their stories using AI tools for manga-style comic creation, offering subscription tiers and revenue sharing. The startup has raised $4 million in seed funding led by Seven Seven Six. More Here

Dazz, a Palo Alto, CA-based company which specializes in unified security remediation, raised $50M in funding. The round, which brought the total amount to $110M, was led by Greylock, with participation from Cyberstarts, Insight Partners and Index Ventures. More Here

Harvey, a San Francisco, CA-based provider of a legal AI platform, raised $100M in Series C funding, at $1.5 Billion valuation. The round was led by GV (Google Ventures) with participation from OpenAI, Kleiner Perkins, Sequoia Capital, Elad Gil, and SV Angel. More Here

Promptfoo, a San Francisco, CA-based open-source LLM testing company, raised $5M in Seed funding. The round was led by Andreessen Horowitz with participation from Tobi Lutke (CEO, Shopify), Stanislav Vishnevskiy (CTO, Discord), Frederic Kerrest (Vice-Chairman & Co-Founder, Okta), and many other top executives in the technology, security, and financial industries. More Here

Vijil, a Menlo Park, CA-based company delivering AI agents to enterprises, raised $6M in Seed funding. The round was led by AIStart seed fund and Gradient Ventures. More Here

Joy, an Oakland, CA-based provider of a new parenting tech platform offering 24/7 expert-led support for parents, raised $10M in Seed funding. The round was led by Forerunner. Other investors included Magnify Ventures, David Heller, Wesley Capital, Obvious Ventures, Ogden Cap, Maywic, Rogue Venture Partners and WTI. More Here

Lakera, a San Francisco, CA-based real-time generative AI (GenAI) security company, raised $20M in Series A funding. The round, which brought the total amount to $30M, was led by Atomico, with participation from Citi Ventures, Dropbox Ventures, and existing investors including redalpine. As part of this round, Atomico Partner Sasha Vidiborskiy will join Lakera’s board. More Here

NoPalm Ingredients, a Wageningen, the Netherlands-based biotechnology company producing yeast oils, raised €5M in Seed funding. The round was led by Rubio Impact Ventures, with participation from Fairtree Elevant Ventures, Oost NL, Willow Capital Investments, and The Netherlands Enterprise Agency (RVO). More Here

Star Catcher, a Jacksonville, FL-based company which specializes in space-based energy generation, raised $12.25M in Seed funding. The round was led by Initialized Capital and B Capital, with participation from Rogue VC. More Here

H55, a Sion, Switzerland-based company which specializes in electric aviation technologies, raised CHF65M in Series C funding. Backers included Government of Quebec. More Here

Pearl, a Los Angeles, CA-based company which specializes in dental AI, raised $58M in funding. The round was led by Left Lane Capital, with participation from Smash Capital, Alpha Partners, and existing investors, Craft Ventures and Neotribe Ventures. More Here

Uplimit, a San Francisco, CA-based company which specializes in AI-powered enterprise learning, raised $11M in Series A funding. The round was led by Salesforce Ventures, alongside existing investors GSV Ventures, Greylock Partners, and Cowboy Ventures, and new investors Translink Capital, Workday Ventures, and Conviction. More Here

Clarapath, a White Plains, NY-based medical robotics company modernizing and transforming how pathology laboratories process tissue, raised $36m in Series B-1 funding. The round was led by Northwell Ventures with participation from CU Healthcare Innovation Fund, Mayo Clinic, and Ochsner Ventures. More Here

rift, a San Francisco, CA-based sales platform focusing on automating operational sales work, raised $5M in seed funding. The round was led by Sequoia, with participation from Y Combinator and Soma Capital. More Here

SoundHealth, a San Francisco, CA-based medical technology company raised $7M in Seed funding. The round was led by Moai Capital and J4 Ventures with participation from TeleSoft Partners, Tau Ventures, TechU Ventures and Rhythm Venture Capital. More Here

TMRW Life Sciences, a NYC-based creator of the only FDA-cleared automated specimen management and storage platform for frozen human sperm, eggs and embryos, raised $28M in Series D funding. The round was led by 5AM Ventures with participation from FIOS Venture Holdings, DF Investment Partners, Transformation Capital, Life Sciences Innovation Fund, and Casdin Capital. More Here

Zest Security, a NYC-based provider of an AI-powered cloud risk resolution platform, raised $5M in funding. Backers included Hanaco Ventures, Silvertech Ventures and angel investors. More Here

Language I/O, a Cheyenne, Wyo-based leader in AI-powered, multilingual customer support technology, raised $5M in funding. The round was led by Gutbrain Ventures with participation from State of Wyoming’s Venture Capital fund, Joint Effects, PBJ Capital, Omega Venture Partners and the Raptor Group. More Here

Skippio, a Dublin, Ireland-based tech startup providing a platform to enhance the fan experience at large-scale venues and events, raised €540K in Seed funding. The round was led by private investors with the support of Enterprise Ireland High-Potential Start-Up (HPSU) funding. More Here

Exottica, a Barcelona, Spain-based online tour operator for complex vacation packages, raised €60m in Series D funding. The round was led by Quadrille Capital with participation from new investors All Iron, ICF, 14W, Mangrove, Bonsai, Sabadell and Aldea. More Here

NetFabric, a Zurich, Switzerland-based network observability startup, raised $2.2m in pre-seed funding. The round was co-led by Founderful and Playfair Capital. More Here

Splight, a San Francisco, CA-based AI startup which specializes in grid operations technologies, raised $12M in Seed funding. The round was led by noa (formerly A/O) and joined by EDP Ventures, Elewit, Draper Cygnus, Draper B1, Ascent Energy Ventures, Fen Ventures, Reaction Global, Barn Investments, and the UC Berkeley Foundation, among others. More Here

Sojo Industries, a Bristol, PA-based mobile automation and robotics manufacturer for food and beverage assembly, raised $10M in Series A funding. Backers included Schreiber Ventures and Tech Council Ventures. More Here

Access Curated Resources, Support Our Newsletter

2700+ US Angel Investors & VC Firms Contact Database (Email + LinkedIn Link) (Access Here)
400+ French Angel Investors & Venture Capital Firms Contact Database (Email + LinkedIn Link) (Access Here)
1000+ Euro Tech Angel Investors & VC Firms Database (Access Here)
350+ Indian Angel Investors & Venture Capital Firms Contact Database (Email + LinkedIn Link) (Access Here)
Building Cap Table As A Founder: Template to Download (Access Here)
Early Stage Startup Financial Model Template For Fundraising (Access Here)

Venture Capital Updates

Bregal Sagemount, a NYC-based growth-focused private equity firm, closed its inaugural small-cap fund, Bregal Sagemount Basecamp I, at $500M. The Fund closed at its target and hard cap, inclusive of support from existing Limited Partners, a handful of new institutional investors, and a significant GP commitment. More Here

Featured Article

Marc Andreessen: When The VCs Say “No”..

Many founders come across news like 'Startup founder secures funding after pitching to 100 VCs' A few examples could be Canvas - “How 100 VC Rejections Led To A $26 Billion Startup For This 35-Year-Old”. You will see tons of articles surfing the internet..

Looking at this news, founders often feel motivated to pitch to as many investors as possible.

Image Source: Mintzedge

I agree that one "no" doesn’t mean anything—the VC could just be having a bad day.

But If you meet with five or six or eight VCs and they all say no, it’s not a coincidence. There is something wrong with your plan.

In fact, many founders are inspired by stories of startup founders securing funding after pitching to numerous VCs, but they often overlook the fact that these successful founders continuously refined their plans with each pitch.

Meeting with more VCs after a bunch have said no is probably a waste of time. Instead, retool your plan—which is what this post is about.

Remember VCs rarely actually say “no”—more often they say “maybe”, “not right now”, “my partners aren’t sure”, or “that’s interesting, let me think about it”.

They do that because they don’t want to invest in your company given the current facts, but they want to keep the door open. And that’s exactly what you want—you want to be able to go back to them with a new set of facts, change their minds, and get to “yes”.

The second thing to consider.. Read more in our recent Venture Curator Newsletter.

Startup’s Latest Buzz

Acquisition & Going Public

Zeitview, a Los Angeles, CA-based company providing automated inspection solutions, acquired all of the assets of Clearsight, which specializes in transmission, distribution and substation inspections with integrated AI and analytics. More Here

Layoffs & Bankruptcy

Byju's, once India's biggest startup, faces insolvency proceedings over a $19 million debt to the cricket board. CEO Raveendran warns of potential service shutdown and mass employee exits in a court filing. The ed-tech giant, valued at $22 billion at its peak, has suffered recent setbacks including job cuts and investor accusations of governance lapses. More Here

Startups & People

Apple faces a new antitrust investigation in Spain over potential unfair trading conditions for App Store developers. The Spanish competition authority, CNMC, could impose a fine of up to 10% of Apple's global annual turnover if it finds a breach of competition rules. This investigation adds to Apple's growing list of antitrust challenges in Europe, including recent EU fines and probes related to the Digital Markets Act compliance.

Elon Musk launched a poll on X asking if Tesla should invest $5 billion in xAI, with early votes favoring the move. The poll follows Tesla's lowest profit margin in 5 years due to price cuts and increased AI spending. Musk suggests xAI could help Tesla's self-driving technology and integrate Grok chatbot with Tesla's software.

Latest In Emerging Tech

VCs are still pouring billions into generative AI startups (More Here)

The first half of 2023 saw 225 generative AI startups raise $12.3 billion, with early-stage deals dominating at $8.7 billion across 39 deals.
Notable investments included xAI ($6 billion), Moonshot AI ($1 billion), and Mistral AI ($502.6 million).
The AI training data market is projected to grow from $2.5 billion to $30 billion in a decade, while model training costs remain high (GPT-4: $78 million, Google Gemini: $191 million). Despite substantial investments, profitability remains elusive, with OpenAI potentially facing a $5 billion loss in 2023 despite $3.4 billion in revenue.

CrowdStrike, a cybersecurity firm, offered its partners a $10 Uber Eats gift card as an apology for a botched update that crashed millions of computers worldwide on July 19, 2024. The update affected approximately 8.5 million Windows devices, causing widespread disruptions at airports, hospitals, and businesses across the globe. CrowdStrike's CEO George Kurtz and CSO Shawn Henry issued public apologies, acknowledging the gravity of the situation and promising full transparency.

Mistral released its new flagship AI model, Large 2, with 123 billion parameters, claiming performance on par with top models from OpenAI and Meta in code generation, mathematics, and reasoning. The model features a 128,000 token window, improved multilingual support for 12 languages and 80 coding languages, and is designed to minimize hallucinations. Mistral Large 2 is available on major cloud platforms and can be tested for free on Mistral's ChatGPT competitor, le Chat.

Apple is reportedly developing its first foldable iPhone, codenamed V68, which might arrive in 2026, marking its first major design change since the iPhone X in 2017. The popularity of folding smartphones is rising, with a 49 percent market growth in early 2024, making it a strategic time for Apple to enter this market to boost its declining sales. The folding iPhone project has progressed beyond the conceptual stage, involving suppliers, and is expected to be a flip phone similar to Motorola's Razr or Samsung's Galaxy Z Flip6.