Sony Music's Legal Notice To 700 Companies For Using Artist Music & Figma Selling Stake for $600 Million to Sequoia Capital

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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 -

• Sony Music Group has sent legal notice to over 700 tech companies warning against using its artists' music to train AI systems without permission.

• Figma is finalizing a $600-900 million stake sale at a $12.5 billion valuation after its $20 billion Adobe acquisition collapsed to Investors include Fidelity and Sequoia.

• OpenAI has reached a deal to use Reddit's data for training AI models like ChatGPT and bring new AI features to Reddit users and moderators.

• Stability AI is in talks with investors, including Sean Parker and Prem Akkaraju, for a significant equity investment to support the cash-strapped firm.

• Vercel, a San Francisco, CA-based frontend cloud platform, raised $250M in Series E funding, at a valuation of $3.25B. The round was led by Accel.

• Featured Article : What's Better Than Product Market Fit (PMF)? It's Product Market Distribution Fit (PMDF)

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STARTUP FUNDING UPDATES

Agora, a NYC- and Tel Aviv, Israel-based provider of real estate investment management solutions, raised $34M in Series B funding. The round was led by Qumra Capital, with participation from Insight Partners and Aleph. More Here

Vercel, a San Francisco, CA-based frontend cloud platform, raised $250M in Series E funding, at a valuation of $3.25B. The round was led by Accel, with participation from other existing investors including CRV, GV, Notable Capital (previously GGV Capital), Bedrock, Geodesic Capital, Tiger Global, 8VC, and SV Angel. More Here

Khosla Ventures and Pear VC have led a $9.25 million extension round for Honey Homes, a startup offering dedicated handymen for homeowners, tripling its total funding to $21.35 million. With surging member growth and expansion plans, Honey Homes aims to reach $10 million in annual recurring revenue in 2024 and profitability in the next couple of years. More Here

Sine Digital, a London, UK-based independent performance marketing agency, raised $2.5m in Seed funding. The investment came from No Guarantees Productions, a theatrical production company. More Here

Voxel51, an Ann Arbor, MI-based company which specializes in visual AI, raised $30M Series B funding. The round was led by Bessemer Venture Partners, with participation from new investor Tru Arrow Partners and existing investors Drive Capital, Top Harvest Capital, Shasta Ventures and ID Ventures. More Here

Recall.ai, a Y Combinator-backed startup based in San Francisco, which provides developer infrastructure and a unified API to access raw data from virtual meeting platforms like Google Meet, Microsoft Teams, and Zoom, enabling companies to build AI-powered meeting bots or apps. It has raised a $10 million Series A funding round led by Ridge Ventures and Industry Ventures. More Here

Leya, a Stockholm, Sweden-based legal tech startup, raised $10.5M in Seed funding. The round was led by Benchmark with participation from Hummingbird, SV Angel and Y-Combinator. More Here

Numra, previously known as Autonifai, a Dublin, Ireland-based AI startup providing a finance assistant services, raised €1.5M in funding. The round was led by Elkstone, with contributions from angel investors. More Here

InstaAstro, a Mumbai, India-based provider of an online astrology platform, raised $2.30M in Pre-Series A funding. Backers included LogX Ventures, Singularity Ventures, IR Capital Partners, and Aloke Bajpai, MD & CEO of Ixigo. More Here

Aeropay, a Chicago, IL-based provider of Pay-By-Bank solutions for businesses, raised $20M in Series B funding. The round was led by Group 11 with participation from Chicago Ventures and Continental Investment Partners. More Here

PolyAI, a London, UK-based provider of enterprise voice assistants, raised $50M in Series C funding. Backers Included Hedosophia, Nvidia’s NVentures, Zendesk, Khosla Ventures, Georgian, Point72 Ventures, Sands Capital and Passion Capital. More Here

Bedrock Materials, a Chicago, IL-based battery technology startup launched out of Stanford University in 2023, raised $9M in Seed funding. The round was led by Trucks Venture Capital, Refactor Capital, and Version One Ventures. More Here

Metabolon, a Morrisville, NC-based company which specialises in providing metabolomics solutions for life science research, diagnostic, therapeutic development, and precision medicine applications, received a $60M credit facility. Trinity Capital made the financing. More Here

Watershed Health, a New Orleans, LA-based company driving patient care coordination across the healthcare ecosystem, raised $13.6M in funding. The round was led by First Trust Capital Partners with participation from FCA Venture Partners, Create Health Ventures, Impact Engine, 450 Ventures, LDH Ventures II/Launchpad Digital Health, MassMutual Ventures, Capstar Partners and Wanxiang Healthcare Investments. More Here

CinDome Pharma, a Cincinnati, OH-based company dedicated to advancing a safe, chronic therapy for gastroparesis, raised $40M in Series B extension funding. The round, which brought the total amount to $59M, included participation from Perceptive Advisors and CinRx Pharma. More Here

Sigma, a San Francisco, CA-based provider of a cloud analytics solution built natively for cloud scale, raised $200M in Series D funding. The round was led by Spark Capital and Avenir Growth Capital with participation from new investor NewView Capital. All previous investors also participated, including Snowflake Ventures, Sutter Hill Ventures, D1 Ventures, Xn Ventures, and Altimeter Capital. More Here

trawa, a Berlin, Germany-based green energy provider, raised €10M in Seed funding. The round, which brought the total amount to over $12M, was led by Balderton Capital. AENU also participated in the round, alongside previous investors Speedinvest, Magnetic and TinyVC. More Here

c/side, a San Francisco, CA-based cybersecurity company with tools for monitoring, optimizing, and securing vulnerable browser-side third-party scripts, raised $1.7M in Pre-Seed funding. The round was led by Scribble Ventures, with participation from individual investors including Roar Ventures, Kathy Korevec, Dan Scheinman, Jason Warner, Mike Taylor, Kevin Van Gundy, Zain Rizavi, Daniel Lopez, Dan Smith and Nick Gianos. More Here

Fay, a San Francisco, CA-based company connecting people with registered dietitian nutritionists, raised $25M in funding. After an unannounced seed round led by General Catalyst, the new $20M Series A round was led by Forerunner Ventures with participation from General Catalyst and 1984. More Here

Gamma, a San Francisco, CA-based provider of an AI powered presentation platform, raised $12M in Series A funding. The round was led by Accel, with participation from Script Capital, South Park Commons, Lorimer Ventures, and Fellows Fund. More Here

NuLink, a Singapore-based company developing data privacy solutions for Web3 dApps, raised $11.3M in funding. The round was led by DWF Labs, Poolz, and ViaBTC, with CheckPush, 0xwilds, Coinvestor, 0xbull, Alpha Capital, MNST Platform, and Aza Ventures as additional investors. More Here

CRMBonus, a São Paulo, Brazil-based provider of a marketing automation platform, raised $75M in Series B funding. The round was led by BOND with participation from Valor Capital and other prominent investors. More Here

Laws of Motion, a NYC-based provider of AI sizing technology for eCommerce brands and retailers, raised $5M in seed funding. Backers included from Corazon Capital, The Scout Program at Sequoia Capital, Leadout Capital, Raine Group Senior Consumer Advisor Eva Jeanbart-Lorenzotti and John Howard, Co-Managing Partner of Irving Place Capital and a Board Member of Good American, Skims, and Frame. More Here

Spoor, a startup based in Oslo, Norway, aims to use AI and machine learning to detect birds on video and predict their flight patterns, helping wind farms mitigate the risk of impacting bird populations and comply with environmental regulations. It has raised a $4 million seed round from investors including Futurum Ventures, Nysnø, Superorganism, and Ørsted Ventures. More Here

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VENTURE CAPITAL UPDATES

Shilling, A Portuguese venture firm has launched a €50 million "Opportunity Fund" to invest in growth-stage startups, both from its own portfolio and new companies. The fund aims to address the gap in funding for growth-stage startups in Portugal, which has a vibrant startup ecosystem but one of the lowest VC investment-to-GDP ratios in Europe. Over 90% of the €50 million target was raised at the first close, and the fund has already invested in Shilling portfolio company Coverflex. More Here

FEATURED ARTICLE

What's Better Than Product Market Fit (PMF)? It's Product Market Distribution Fit (PMDF)

Having a great product is useless unless you also have the right channels to sell it through. This is particularly true with some sorts of businesses — a winery, for example, will never get to scale unless the product is carried by one of the large distributors (with alcohol, the 3-tier distribution system is mandated by law). Medical products are also controlled by a few large distributors. Or if you’re a startup selling a mobile app, your distribution relies completely on the iOS and Android app stores. You’ll never make it if you don’t optimize your presence in that sales channel.

Today, of course, many companies sell directly online instead of through traditional resellers or retail stores. And yet distribution still matters — putting your product on Amazon will get you 1,000 the distribution you could ever get on your standalone website. And Amazon charges a toll for that.

So all of this boils down to the one equation: CAC < LTV (Customer Acquisition Cost < Life Time Value). If you don’t have efficient distribution then your Customer Acquisition Cost will be too high. And if you have to pay a toll to get distribution then the Lifetime Value of a customer will be lower. But Distribution ain’t cheap.

If you are aware of this - Apple decided to stop selling through retailers and open their own branded stores instead. It was a dicey move because they were giving up the distribution of Best Buy, Circuit City, and all the rest.

But Steve Jobs said, “We sell a premium product and we need to take control of the customer experience to get the premium price”. So in essence he went from a low-cost low-margin distribution model to a high-cost high-margin distribution model. And this decision worked out well.

Licensing can also be a way to get distribution. A famous case study from history is consumer videotape systems…Read More Here

STARTUP’S LATEST BUZZ

ACQUISITION & EXITS

Quantic Electronics, a Simi Valley, CA-based electronic component company, announced the acquisition of M Wave Design, a supplier of ferrite-based RF and microwave components for aerospace, defense, and quantum computing applications. More Here

LAYOFFS & BANKRUPTCY

Synapse, a troubled banking-as-a-service startup, faces potential liquidation after mismanaging its estate during Chapter 11 bankruptcy. The U.S. Trustee alleges Synapse cut off access to its computer systems, leading to disputes with partners like Evolve Bank & Trust. Synapse's planned $9.7M asset sale to TabaPay fell apart, further complicating the startup's financial troubles. More Here

STARTUPS & PEOPLE

Stability AI is in talks with investors, including Sean Parker and Prem Akkaraju, for a significant equity investment to support the cash-strapped firm. The company, which generated less than $5 million but lost over $30 million in Q1, owes nearly $100 million. Recently, it laid off staff and its founder Emad Mostaque resigned as CEO. Current investors include Lightspeed Venture Partners, Ashton Kutcher's Sound Ventures, Coatue, and Intel. More Here

Figma is finalizing a deal for employees and early investors to sell stakes at a $12.5 billion valuation, following the collapse of its $20 billion acquisition by Adobe. New and existing investors, including Fidelity and Sequoia, will acquire stakes worth $600-900 million. More Here

Ryan Breslow, founder of Bolt, has proposed settling a lawsuit by investor Activant Capital over a $30 million personal debt added to Bolt's balance sheet. Breslow will cancel 13 million of his shares worth $37 million to repay the loan, while Bolt will buy back $36 million in Activant shares. This aims to resolve allegations that Breslow removed opposing board members and misled investors during fundraising. More Here

LATEST IN EMERGING TECH

OpenAI has reached a deal to use Reddit's data for training AI models like ChatGPT and bring new AI features to Reddit users and moderators. OpenAI CEO Sam Altman holds an 8.7% stake in Reddit, raising potential conflicts. The deal highlights Reddit's strategy of monetizing its vast user-generated content through data licensing agreements, which drove a 450% increase in non-ad revenue last quarter. More Here

Sony Music Group has sent letters to over 700 tech companies warning against using its artists' music to train AI systems without permission, seeking to protect its intellectual property and ensure appropriate compensation. More Here

TikTok is testing the ability for select users in certain markets to upload 60-minute videos, a significant increase from its original 15-second format. While the company hasn't announced plans for a wide rollout yet, the move signals TikTok's embrace of long-form content to compete with YouTube. More Here

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That’s It For Today! Will Meet You On Monday. Happy Weekend!☕

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