OpenAI Raises $6.6 Billion led By Thrive Capital & Google Develops New AI model to Rival OpenAI o1

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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

OpenAI has raised $6.6 billion in a record-breaking funding round, valuing the company at $157 billion. The round was led by Thrive Capital, with participation from Microsoft, Nvidia, SoftBank, and others, bringing OpenAI's total funding to $17.9 billion. Despite its market leadership and projected revenue growth, OpenAI faces increasing competition and recent executive departures as it considers restructuring to attract more investments.

Character.AI, following its $2.7 billion licensing deal with Google and departure of co-founders, has hired Erin Teague as chief product officer. The company, now employee-owned with 100 staff, is focusing on consumer AI solutions and has doubled its user base to 20 million monthly users.

Other Major News

• Amazon recently rolled out a new AI chatbot that is 'safer than ChatGPT' for employees to use. (Scroll To Tech Updates)

• Elon Musk’s xAI moves into OpenAI’s old HQ. (Scroll To Startups & People Updates)

• Google develops new AI model to rival OpenAI o1 (Scroll To Tech Updates)

• Telegram CEO Pavel Durov insists ‘little has changed’ in app’s privacy policies since his arrest. (Scroll To Startups & People Updates)

• How to Not Ask VCs for Money? (Scroll To Featured Article)

• VC & Startups Job Opportunities (Scroll To Today’s Opportunities)

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🗞️ Startup Funding Updates

Xiaodi Hou, former CEO of TuSimple, has launched a new autonomous trucking startup called Bot Auto with $20 million in funding. The company, based in Houston, is leveraging recent AI advancements to accelerate AV development and has begun testing on public roads in Texas. Despite potential challenges, including legal threats from TuSimple, Hou is confident in Bot Auto's future and its focus on cost-effective operations in the U.S. market.

MarqVision, a Los Angeles, CA-based company which specializes in online brand protection, raised additional $16M in funding. The round was led by Altos Ventures, Y Combinator, and Quantum Light, bringing the total Series A raise to $36M.

Billables AI, a San Francisco, CA-based provider of an AI platform for professional service providers, raised $3.9M in Seed funding. The round was led by Wing VC with participation from F7, SignalFire, Darkmode, Alumni Ventures including angel investors from Google, Stanford, SambaNova and more.

Permanent Agriculture, a Washington, DC-based wholesale food marketplace and distributor, raised $3.7M in Seed funding. The round was led by Better Tomorrow Ventures and participation from Atman Capital, Autopilot, Gaingels, Progression, Sugar Mountain, and other investors.

Poolside, a San Francisco, CA-based company building capable AI for software development, closed a $500M Series B funding. The round closed this month with participation from a selection of enterprises, including NVIDIA, Citi Ventures, Capital One Ventures, HSBC Ventures, LG Technology Ventures and eBay Ventures.

Mithradote Bio, a San Diego, CA-based biotechnology company developing the first self-administered antidote against drink spiking, closed a $1m seed funding round. The round was co-led by Taho Pharma and Vickers Venture Partners.

Augmodo, a Seattle, WA-based real-time inventory and task tracker using wearable SmartBadges™ to create live 3D store maps, raised $5M in funding. The round was led by Lerer Hippeau, with participation from Dunnhumby Ventures, NewFare Partners and Simple Food Ventures.

Pallet, a San Francisco, CA-based transportation and warehouse management system, raised $18M in Series A funding. The round, which brought total funding raised to date to $21M, was led by Bain Capital Ventures, with participation from Bessemer Venture Partners and Activant Capital.

Neutreeno, a deep tech startup spinning out of the University of Cambridge (UK), raised $5M in Seed funding. The round was led by Regeneration.VC, with participation from Remarkable Ventures Climate Fund (RVC), Closed Loop Partners, Prequel Ventures, Scania Invest and Beacon Venture Capital.

Printler, a Stockholm, Sweden-based creator of a platform that connects independent artists with art lovers, raised $2m in funding. The investment, a mix of secondaries and a convertible note, was led by True Global Ventures (TGV 4 Plus Fund).

Triveni Bio, a Watertown, MA-based biotech company advancing novel antibody treatments for I&I disorders, raised $115M in Series b funding. The round was led by Goldman Sachs Alternatives with participation from additional new investors Fidelity Management & Research Company and Deep Track Capital, and Series A investors Atlas Venture, Cormorant Asset Management, OrbiMed, Viking Global Investors, and Invus.

Vizit, a Boston, MA-based company which specializes in Visual AI software for global brands and retailers, raised $25M in Series B funding. Backers included Infinity Ventures, Brand Foundry Ventures, and Lakefront Partners, as well as new investors eGateway Capital, Highmount Capital, Lightscape Partners, B37, Stage 1 Ventures, and Roll Tack Ventures, along with many prominent CPG, retail, and technology executives.

iAsk, a Chicago, IL-based provider of an AI “Answer Engine” built for Gen Z, raised $4.2M in seed funding. The round was led by Corazon Capital, with participation from Chingona Ventures, Starting Line VC, Alumni Ventures, Listen VC, Motivate VC, Octava Singapore, Chicago Early Growth Ventures, and multiple prominent angel investors.

Harmonic Security, a San Francisco, CA-based company providing tools to protect sensitive data, raised $17.5M in Series A funding. The round was led by Next47. It joined Ten Eleven Ventures which led the $7M seed round in October 2023.

VieCure, a Denver, CO-based provider of an intelligence platform that aims to democratize community oncology care, raised $45M in funding. The round was led by Northpond Ventures.

Hyivy Health, a Kitchener, ON, Canada-based FemTech pelvic health startup, raised $2M in Seed funding. The round was led by Zcube – Zambon Research Venture with participation from Beresford Ventures, FACIT, Women’s Equity Lab, and the founding partner of Chai Ventures.

Attochron, a Lexington, VA-based provider of a carrier-grade free-space optical communications (FSOC) equipment, raised $15M in Series A funding. The round was led by TCR, Inc.

LoQus23 Therapeutics, a Cambridge, UK-based private biotechnology company investigating small molecule drugs, raised £35M in Series A funding. The round was led by Forbion, alongside existing investors SV Health Investors’ Dementia Discovery Fund (DDF) and Novartis Venture Fund (NVF).

Plumery, an Amsterdam, the Netherlands-based provider of a digital banking experience platform, raised $3.3M in additional funding. Backers included DN Capital and Fontes managed by VC firm QED Investors.

📰 Venture Capital Updates

DCVC, a Palo Alto and San Francisco, CA-based deep tech venture capital firm, closed its first dedicated climate fund and its newest DCVC Bio fund, raising over $700m in funding. This brings total funding closed over the last two-and-a-half years to over $1.6 billion.

Peak XV trims fund size and fees as Indian market overheats: Peak XV is reducing its $2.85 billion funds by $465 million, lowering management fees to 2% and carried interest to 20%. The firm has $9 billion in assets under management, $2 billion yet to deploy, and has made $10 billion in gains across 400+ companies, including 50+ unicorns and 40 businesses with $100M+ annual revenue.

Prospect Partners, a Chicago, IL-based pre-lower-middle market private equity firm, closed Prospect Partners Fund V, at $225m. Fund V received interest from a diverse group of new investors, successfully expanding and diversifying Prospect’s investor base. Investors include endowments and foundations, family offices, wealth managers, and fund of funds across the United States.

📌 Featured Article

How to Not Ask VCs for Money?

When an investor asks you why you need to raise money, the worst thing you can reply with is that it’s to extend your runway.

Many founders make this mistake...

“Remember - Investors care about growth and having a clear set of milestones you think you can hit. They see a lot of opportunities, and the most exciting ones are fires that are already growing that they can throw gasoline on top of.”

This is similar to how your customer doesn’t care about your product, they care about the benefit or transformation your product provides for them.

Show them an opportunity that’s growing quickly but could grow faster with some help, rather than one that needs more money to survive a little longer in the hopes of striking gold. The best way to pitch to investors when they ask is to say something like -

"We need $3M to accomplish these 3 critical projects we have planned that will take us from X users/revenue to 5x in 18 months. We need these 4 new positions to pull it off and we already have great candidates for each role that we're in active discussions with."

It's a small detail, but an important one to get right when you're looking for investment for your startup.

[Check out our Venture Curator newsletter - to get insights on startups, AI and venture capital from leading founders & investors]

📑 Startup’s Latest Buzz

Acquisition & Going Public

Bubbles, a NYC-based provider of a no-code platform for application development, acquired Flusk, an Amsterdam, the Netherlands-based provider of a security and application monitoring tool.

Huma, a London, UK-based innovator in healthcare AI and digital health solutions, announced its acquisition of eConsult, a UK-based provider of a digital-first triage and automated consultation platform across primary and emergency care.

Layoffs & Bankruptcy

Drata, a security compliance automation platform, has laid off 9% of its workforce (40 people) despite reporting strong growth metrics earlier.

Startups & People

Elon Musk's AI startup xAI has moved into OpenAI's former headquarters in San Francisco's Mission district, a building Musk claims he's been leasing since his time at OpenAI. OpenAI recently relocated to a new office just four blocks away. Despite Musk's plans to move his companies to Texas, xAI may remain in California, with employees splitting time between the San Francisco and Palo Alto offices.

Pavel Durov, CEO of Telegram, insists that the app's privacy policies have remained mostly unchanged since his arrest, highlighting that Telegram has been cooperating with authorities for years to combat criminal activities. Durov revealed that Telegram has provided IP addresses and phone numbers of suspected criminals to government agencies since 2018, ensuring compliance with legal requests from various countries. Facing charges in France for allegedly allowing criminal activities on his platform, Durov defends Telegram by stating the company aims to protect activists and regular users while not permitting misuse by criminals.

🤖 Latest In Tech

Google is developing a new AI model designed to compete with OpenAI's o1 in logical reasoning and complex problem-solving tasks, focusing on math and programming. Bloomberg reported that multiple teams at Google have made strides in "AI reasoning software," using a "chain of thought" technique to solve multi-step problems. Google Deepmind's recent research indicates that additional computing power during inference can significantly enhance AI performance, as shown by models like AlphaProof and AlphaGeometry 2.

WP Engine has filed a lawsuit against Automattic and Matt Mullenweg, accusing them of extortion and abuse of power related to WordPress trademark issues. The lawsuit follows a period of conflict between the parties, including accusations of trademark infringement and debates over contributions to the WordPress community. WP Engine claims Mullenweg's recent actions have exposed conflicts of interest and governance issues that threaten trust in the WordPress ecosystem.

Amazon has launched an internal AI chatbot called Cedric, discouraging employees from using external tools like ChatGPT due to security concerns. Cedric, built on Amazon's Bedrock platform using Anthropic's Claude model, is promoted as a safer alternative for tasks such as document summarization and brainstorming. While all Amazon employees now have access to Cedric, the company emphasizes its security features and restricts its use to internal purposes only.

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