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Stability AI Raises $80 Million with new CEO and board & Fearless Fund Co-founder Step Down

Stability AI Raises $80 Million with new CEO and board & Fearless Fund Co-founder Step Down

Venture Daily Digest - 26/06/2024

Venture Daily Digest
June 26, 2024

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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, VC funds, and some cool tech – all in just 5 minutes ☕! Today’s major updates include -

David Sacks, Mike Maples, Jason Calacanis, Sam Lessin, Garry Tan, and Walter Isaacson Invested $5 Million In AI license marketplace startup - Created by Humans.
Fearless Fund, supporting Black women entrepreneurs, faces leadership change as co-founder step down and legal challenge to its grant program.
Cash-strapped Stability AI raises $80 Million with new CEO and board.
The European Union has accused Microsoft of breaching competition rules by bundling its Teams collaboration tool and could face fines up to 10% of its annual worldwide turnover.
Featured Article : How To Measure If Your Startup Has Network Effects.

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Startup Funding Updates

EvolutionaryScale, US based startup developing AI models for protein generation, has raised $142 million in a seed round led by Nat Friedman, Daniel Gross, and Lux Capital, with participation from Amazon and Nvidia's NVentures. More Here

Created by Humans, a new startup based in the United States, aims to provide a marketplace where creators can license their intellectual property directly to AI companies for training purposes. Founded by Trip Adler, former CEO of Scribd, the company has raised $5 million in funding from prominent investors including David Sacks, Mike Maples, Jason Calacanis, Sam Lessin, Garry Tan, and Walter Isaacson. More Here

Bright Machines, a San Francisco, CA-based company which specializes in intelligent, software-defined manufacturing, raised $126M in Series C funding. The round, which brought the total amount to over $400M, consisted of $106M BlackRock with participation from NVIDIA, Microsoft, Eclipse, Jabil and Shinhan Securities, and $20M in venture debt from J.P. Morgan. More Here

Stability AI, the creator of Stable Diffusion, has secured new funding from investors including Greycroft, Coatue Management, Sound Ventures, Lightspeed Venture Partners, and notable individuals like Eric Schmidt and Sean Parker. The beleaguered startup, which faced financial challenges and leadership changes, aims to refocus on generative AI technologies for media creation and enterprise solutions under Parker's new role as executive board chairman. More Here

Payabli, a Miami, FL-based payments infrastructure solution for software companies, closed a $20M Series A funding. The round was led by QED Investors with participation from existing investors TTV Capital, Fika Ventures and Bling Capital. More Here

Etched, the Cupertino, CA-based creator of Sohu, a transformer-specialized AI chip, raised $120M in funding. The round was led by Primary Venture Partners and Positive Sum Ventures, with participation from Hummingbird, Fundomo, Fontinalis, Lightscape, Earthshot, Two Sigma, Oceans Venture, Skybox Data Centers, and angels like Peter Thiel and Amjad Masad. More Here

Create Music Group, a Hollywood, CA-based music and entertainment company, received a $165M investment. The round was led by private equity investment firm Flexpoint Ford. Charles Goldstuck also joined the funding round. More Here

Coder, an Austin, TX-based provider of a development platform that keeps developers in flow, raised $35M in Series B2 funding. The round, which brought the total amount to $65M, was led by Georgian, with participation from Uncork Capital, Notable Capital, and Redpoint Ventures. More Here

Metroblocks, a Los Angeles, CA-based data center infrastructure development startup, raised $5.2M in Seed funding. The round was led by Current Equity Partners with participation from Serena Capital. More Here

Freyja Healthcare, a Boston, MA-based early-stage medical device company specializing in women’s health, raised $8M in funding. Backers were not disclosed. More Here

TopicFlow, a Vancouver, BC, Canada-based startup that develops an AI-powered performance management platform, raised CAD$2.5M in funding. The round was led by Founders’ Co-Op with participation from Ascend. More Here

Daytona, a NYC-based open source development environment manager, raised $5M in Seed funding. The round was led by Upfront Ventures with participation from existing investor 500 EE. More Here

AnchorZero, a NYC-based platform enabling founders to leverage Roth IRAs for tax savings and financial growth, raised $8M in Seed funding. The round led by Bain Capital Crypto and Spark Capital with participation from Ethereal Ventures, Mischief Capital, Pascal Capital, Robot Ventures and angel investor Sarah Meyohas. More Here

Cloudian, a San Mateo, CA-based company which specializes in secure S3-compatible AI data lake platforms, raised $23M in Growth funding. The round was led by Morgan Stanley Expansion Capital. More Here

Zuub, a Los Angeles, CA-based dental revenue cycle automation company, raised $9M in Series A funding. The round was led by Vertical Venture Partners with participation from existing investors Bonfire Ventures and MTech Capital. More Here

opus1.io, a Palo Alto, CA-based end-to-end practice management platform for lesson and class-based performing arts businesses, received an investment from Five Elms Capital. The amount of the deal was not disclosed. More Here

Rocketlane, a San Mateo, CA-based provider of a PSA and client onboarding platform, raised $24M in Series B funding. The round, which brought the total amount to $45M, was co-led by 8VC, Matrix Partners India, and Nexus Venture Partners. More Here

Micruity, a San Mateo, Ca-based financial technology infrastructure company, raised $5.0M in strategic funding. Backers included Prudential, State Street Global Advisors, and TIAA Ventures, as well as additional investments from current partners Pacific Life and Western & Southern Financial Group. More Here

TwoStep Therapeutics, a Palo Alto, CA-based biotechnology company developing new targeted therapeutics for solid tumors, raised $6.5m in seed funding. The round was led by NFX, with participation from other investors including 2048 Ventures, Alexandria Venture Investments, Cooley’s affiliated fund GC&H Investments, and the family office of the founder of Arcadia Investment Partners. More Here

Foray Bioscience, a Cambridge, MA-based startup that deploys plant-based biomanufacturing to protect and restore natural ecosystems, raised $3M in Seed funding. The round was led by ReGen Ventures. Additional investors included The Engine Ventures, Susquehanna Sustainable Investments, Understorey Ventures, Superorganism, and others. More Here

BlueFlame AI, a NYC and London, UK-based generative AI platform for alternative investment managers, closed a $5m Series A funding round at a valuation of $50m. The amount was raised through BlueFlame’s network of industry leaders and strategic partners, along with significant participation from the management team. More Here

Formic, a Chicago, IL-based provider of robots-as-a-service (RaaS) automation to U.S. manufacturers, raised $27.4M in Series A funding. The round was led by Blackhorn Ventures with participation from Mitsubishi HC Capital America, NEC, Translink Capital, Alumni Ventures, FJ Labs, Lux Capital, Initialized Capital and Lorimer Ventures. More Here

Norm Ai, a NYC-based provider of an AI-powered regulatory compliance platform, raised $27m in Series A funding. The round was led by Coatue, with participation from Bain Capital Ventures, Blackstone, New York Life Ventures, Citi Ventures, TIAA Ventures, and the former President of Blackstone, Tony James. More Here

Deskpro, an Austin, TX-based company developing flexible help desk software, raised $25M in Series A funding. The round was led by Elsewhere Partners. More Here

Route, a Lehi, UT-based post-purchase package tracking and protection solution provider, raised $40m in Series C funding round at a $1.4 billion valuation. The round was led by Hanaco VC with participation from JAWS Ventures, Madrona Ventures, and Granger. More Here

LiveEO, a Berlin, Germany-based company using high-resolution satellite data and AI to transform raw satellite data into automated actionable insights, raised €25M in Series B funding. The round was led by NordicNinja and DeepTech & Climate Fonds (DTCF). They joined existing investors MMC Ventures, Dieter von Holtzbrinck Ventures (DvH Ventures), Helen Ventures, Matterwave, motu ventures, Segenia Capital, Hannover Digital Investments and more. More Here

Sift, an El Segundo, CA-based provider of an observability platform for hardware sensor data, raised $17.5M in Series A funding. The round, which brought the total amount to $25M, was led by GV (Google Ventures). More Here

Upword, a Santa Monica, CA-based emerging knowledge management solutions provider, raised $3M in Pre-Seed funding. Backers included Telefonica (Wayra X), Go Ahead Ventures, and Goodwater Capital. More Here

k-ID, a Singapore-based provider of a global compliance engine that simplifies online safety and privacy management for game developers, parents, kids, and teens, raised $45M in Series A funding. The round, which brought the total amount to $51M, saw participation from Andreessen Horowitz (a16z) and Lightspeed Venture Partners, Konvoy, TIRTA, Okta, and Z Venture Capital from the Japanese tech leader LY Corporation. More Here

Slushy, a Miami, FL-based provider of an adult content platform, raised $10.2M in Seed funding. Backers included Mantis VC, Electric Feel Ventures, Jon Oringer, Sean Rad, Edison Chen and Brooklyn Johnny. More Here

CereTax, an Atlanta, GA-based provider of a sales tax solution, raised $9M in funding. The round was led by S3 Ventures, with participation from Wild Basin Investments and Leaders Fund. More Here

Endogenex, a Minneapolis, MN-based clinical-stage medical device company, raised $88M in Series C funding. Backers included Hatteras Venture Partners, Lumira Ventures, Orlando Health Ventures, Intuitive Ventures, Longitude Capital, Mayo Clinic, and Santé Ventures. More Here

Exsilio Therapeutics, a Boston, MA-based biotechnology company developing genomic medicines for a broad range of diseases, raised $82M in Series A funding. The round was led by Novartis Venture Fund and Delos Capital, with participation from OrbiMed, Insight Partners, J.P. Morgan Life Sciences Private Capital, CRISPR Therapeutics, Innovation Endeavors, Invus, Arc Ventures, and Deep Insight. More Here

Compredict, a Darmstadt, Germany-based company which specializes in AI-powered solutions for software-defined vehicles, raised $15M in Series B funding. The round was led by Woven Capital, Toyota’s growth fund, with participation from existing investor Shift4Good. More Here

Allora Labs, a NYC-based provider of a self-improving decentralized AI network, closed a strategic funding round. The round brought the total amount to $35M. Backers to date include Polychain, Framework Ventures, CoinFund, Blockchain Capital, Archetype, Slow Ventures, Mechanism Capital, Delphi Digital, among others. More Here

SkyCell, a Zug, Switzerland-based technology company empowering the pharmaceutical supply chain, raised $116M in Series D funding. The round consisted of US$59M from Tybourne Capital Management and CCI and a US$57M equity investment from Catalyst. More Here

Cypris Therapeutics, a NYC-based drug discovery company, raised over $500K in Pre-Seed funding. The round was led by Ichor Life Sciences, a Syracuse-based contract research organization. More Here

Neustark, a Berne, Switzerland-based carbon removal provider, raised $69M in funding. The round was led by Decarbonization Partners, with participation from Blume Equity, Holcim, Siemens Financial Services, Verve Ventures, and ACE Ventures. UBS added debt financing. More Here

Heyday Health, a Cambridge, MA-based virtual-forward value-based care provider focused on Medicare and dual-eligible patients, raised $12.5M in funding. Backers included Gradient Ventures, Lionbird, Great Oaks Capital, and Kate Ryder. More Here

Venture Capital Updates

Fearless Fund, a venture capital firm dedicated to supporting Black women entrepreneurs, faces challenges as co-founder Ayana Parsons steps down and a lawsuit threatens its grant program. Despite investing $26 million in over 40 companies, the fund is battling a conservative group's legal action claiming its grants violate civil rights laws. More Here

Elsewhere Partners, an Austin, TX-based tech-focused private equity firm, closed Fund III, at $258M. With EP Fund III, Elsewhere Partners will further make majority $20M to $50M investments in growth-ready software companies led by strong technical founders that have scaled to $3 – 12M in revenue. More Here

Featured Article

How To Measure If Your Startup Has Network Effects.

Twitter. Amazon. Apple. Meta. Uber. Salesforce. Tesla. These are some of the most impactful and significant companies in the world.

Each one is very different in a lot of ways, but there’s a single property that defines them all and lies behind their success: Network effects.

All these big companies used network effects as a moat to build long-term sustainable businesses. If you look at the study by NFX you will find that - “network effects are responsible for 70% of the value created by tech companies” since the Internet became a thing in 1994. Even though they are only a minority of companies, companies with network effects end up creating the lion’s share of the value.

If you are wondering what the network effect means -

Network effects are phenomena by which the value of a product or service increases when the number of people who use that product or service increases.

Example: We use WhatsApp because the majority of the people in our network use it and vice versa. As value for each member increases as more members joins.

One of the biggest misconceptions around network effects is confusing growth with engagement and it’s often spoken in a binary way: either you have them, or you don’t. In practice, most companies’ network effects are much more complex, falling along a spectrum of different types and strengths. They’re also dynamic and evolve as products, users, and competition change.

For founders, it’s important to understand the nature of your company’s network effects — including deciding on the set of metrics that help you understand what’s working or not. So in this writeup, we are sharing 4 main categories to measure whether your startup has a network effect: acquisition, competitors, engagement, and economics-related metrics.

We have shared detailed article in our recent Venture Curator newsletter.

Startup’s Latest Buzz

Acquisition & Going Public

Wisk Aero, a subsidiary of Boeing, has acquired Verocel, a software verification and validation company that’s been serving the aerospace industry for 25 years. More Here

Layoffs & Bankruptcy

Startups & People

Otis Chandler, co-founder of Goodreads, has launched Smashing, an AI and community-powered content recommendation app that aims to surface the internet's hidden gems across various formats. The iOS app, now in invite-only beta, allows users to follow their interests, submit content, and vote on recommendations, combining AI technology with community curation. Backed by $3.4 million in seed funding from investors including True Ventures and Blockchange, Smashing seeks to address the fragmentation of online content and drive traffic to publishers rather than replacing long-form content consumption. More Here

Latest In Emerging Tech

OpenAI has made ChatGPT available to all macOS users through a desktop app, accessible with the keyboard shortcut Option + Space. The app allows users to interact with the AI chatbot, upload files, take screenshots, and search through past conversations directly from their Mac computers. This release is part of a broader collaboration between OpenAI and Apple, which includes future integrations with iOS and iPadOS devices, as well as Siri, set to launch later this year. More Here

Google is introducing a new Gemini AI side panel in Gmail, Docs, Sheets, Slides, and Drive for Workspace customers with specific subscriptions. The AI integration offers features like email drafting assistance, content summarization, and information retrieval from emails and Drive files. More Here

The European Union has accused Microsoft of breaching competition rules by bundling its Teams collaboration tool with Office 365 and Microsoft 365 suites. The EU's formal statement of objections suggests that Microsoft's partial unbundling of Teams in 2023 was insufficient to address concerns about restricting competition. If found in breach, Microsoft could face fines up to 10% of its annual worldwide turnover and potential remedies to restore competition in the market. More Here

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