VC Daily Digest - 18/08/2023

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📢 Top Venture Capital News

As venture firms including Sequoia Capital and Softbank face lawsuit over links to FTX, flow of capital to crypto industry could suffer: Eighteen of the largest venture capital firms in the cryptocurrency space, including Sequoia Capital, Softbank, Sino Global and Temasek, have been named defendants in a class-action lawsuit alleging that they enabled the FTX crypto exchange to defraud its users at a “multibillion-dollar scale.” Perspective: If this lawsuit is successful, it could have major implications for the cryptocurrency market, future transparency and the relationship between venture capital and crypto-focused projects. More Here

HealthXCapital’s team joins Jungle Ventures: Seemant Jauhari, the driving force behind HealthXCapital, has joined Singapore-based Jungle Ventures. He brings his expertise in nurturing health tech startups to a region that holds 30% of the global population but receives just 4% of GDP for healthcare. Jauhari's strategy combines capital with strategic partnerships to validate and commercialize startups. He sees a clear opportunity to invest in this undercapitalized stage and region, and believes that sustainable and scalable businesses will drive steady valuations. More Here

6 fintech investors sound off on AI, down rounds and what’s ahead: The fintech landscape has seen a significant shift since the funding boom of 2021. In Q2 2023, global fintech funding declined by 48% to $7.8 billion, hitting a six-year low. This has led to a drop in valuations of fintech firms and a more cautious approach from investors. Amidst this, AI has emerged as a key focus, with many companies integrating it into their operations to stand out. However, experts warn against blind investment in AI, emphasizing the importance of domain knowledge and solving customer pain points. As the market evolves, resilience, perseverance, and a responsible growth mindset are crucial for fintech startups navigating the venture landscape. More Here

Most VCs have no clue what a CTO does: Venture capitalists meticulously scrutinize many aspects of a business, from market size to founder-market fit. However, it seems technical diligence is often overlooked, with investors typically focusing on areas they understand well, such as financials. The presence of a technical co-founder is often seen as a checkbox to tick, despite the varying roles and expertise levels required by different startups. This highlights a blind spot in the investment process, with many investors essentially hoping for the best when investing at the earliest stages. More Here

With the SEC’s sweeping new disclosure rules coming, limited partners are getting back some negotiating power: The Securities and Exchange Commission is reportedly finalizing new fee disclosure rules that could significantly impact hedge funds, private equity shops, and VC firms. These changes, the first major regulatory shift since the financial crisis, would require funds to provide quarterly fee and expense information to all limited partners, among other requirements. Despite resistance from fund managers, limited partners anticipate regaining some negotiating power lost in recent years. More Here

📢 Top Startups News

SpaceX reportedly turned a profit in the first quarter: In Q1, SpaceX turned a profit of $55 million on revenue of $1.5 billion, a significant turnaround from the full-year loss of $559 million in 2022, according to The Wall Street Journal. This financial upswing is attributed to the company's expansion of its Starlink internet satellite service and the development of the Starship rocket. Despite the hefty $5.2 billion in total expenses last year, SpaceX's strategic investments are paving the way for future growth and success. More Here

4 steps founders can take today to improve team recognition tomorrow: A company's most valuable asset is its team, particularly for startups and smaller enterprises. However, retaining talent is a challenge that requires more than competitive compensation and work-life balance. Employee recognition plays a significant role in retention strategies, with 36% of employees citing lack of recognition as a reason for leaving. Moreover, employees receiving consistent recognition generate twice as many ideas. Therefore, it's crucial for leaders to celebrate individual achievements and communicate the reasons behind recognitions, fostering a culture that values contributions and motivates the entire team. More Here

General Motors to Invest $60M in Mitra Chem Battery Maker Startup: In a strategic move to accelerate the development of affordable EV batteries, General Motors has announced a $60 million investment in California-based startup, Mitra Chem. Founded by veteran executives from Toyota Motor and Tesla Inc, Mitra Chem is pioneering lower-cost EV batteries based on lithium iron phosphate chemistry, avoiding the use of expensive minerals like nickel and cobalt. This investment aligns with GM's commitment to build a U.S.-focused battery supply chain and reinforces their efforts in EV battery technology. As GM's VP of Technology Acceleration, Gil Golan, stated, "Mitra Chem’s labs, methods and talent will fit well with our own R&D team’s work.” More Here

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📢 Top AI Startup’s News

Microsoft’s AI-Powered Chatbot Failing to Gain Search Market Share: Despite Microsoft's addition of an AI-powered chatbot to Bing, its market share among search engines remains at 3%, according to a Wall Street Journal report. Microsoft disputes these figures, with CMO Yusuf Mehdi stating they've made more progress in the last six months than in the previous decade. The report suggests the slow adoption could be due to user habits favoring Google and the novelty of using a chat interface for search. More Here

Artificial Intelligence and Copyright — AI: As AI continues to evolve, the U.S. government is grappling with the implications on copyright law. From high-profile lawsuits to Senate hearings and US Copyright Office guidance, the debate is centered on how to balance the rights of creators with the need for AI innovation. While concrete legislative proposals are yet to be introduced, the discussions highlight the urgent need for copyright reforms in the age of AI. More Here

AI Image Generator Market Size-Share 2023, Future Growth, Strategy and Forecast to 2029: The AI Image Generator market is poised for significant growth, with a projected CAGR of 17.5% from 2023 to 2029. This surge is driven by advancements in AI algorithms and deep learning, with applications expanding across various industries. Notably, Lightricks' acquisition of Popular Pays marks a strategic move towards becoming a comprehensive resource for creators and brands. North America leads the market, while the Asia Pacific region shows promising potential. The rise of Non-Fungible Tokens (NFTs) also fuels demand for unique digital art, further propelling the market. More Here

What is a liquid neural network, really?: The concept of liquid neural networks, introduced in 2018 and highlighted in a 2020 research paper, is gaining traction for its adaptability and smaller size. These networks, as explained by Ramin Hasani, Principal AI and Machine Learning Scientist at the Vanguard Group, remain flexible post-training, adapting based on incoming inputs. Liquid neural networks offer potential benefits in robotics, including reduced computing power and increased transparency. However, they require time series data, limiting their application to static images. More Here

Arthur releases open source tool to help companies find the best LLM for a job: Arthur, the machine learning monitoring startup, is launching Arthur Bench, an open source tool designed to help users identify the most effective Language Learning Model (LLM) for their specific data set. This innovative tool addresses the industry-wide challenge of measuring the effectiveness of one tool against another, allowing users to test and measure the performance of various prompts against different LLMs. Whether you're comparing Anthropic to OpenAI, Arthur Bench enables you to make data-driven decisions at scale. For those seeking a more streamlined experience, a SaaS version will also be available. More Here

📢 Top Startup’s Fundraising News

True Anomaly gets regulatory greenlight for first spacecraft reconnaissance mission raised $30M: True Anomaly, a defense-focused space tech startup, has received key permits from NOAA and FCC to demonstrate on-orbit imaging and rendezvous capabilities using its Jackal spacecraft. The company, founded by ex-Space Force members, aims to provide the Pentagon with defensive technology and close the "information asymmetry" between the U.S. and its adversaries in space. They also plan to use the Jackal for real-life training for U.S. warfighters. With a new 35,000-square-foot facility in Colorado, True Anomaly is set to produce a spacecraft every five days, focusing on securing the space domain from threats. More Here

Mercanis Raises $10M Series Seed Investment in Mission to Boost Further Savings for Procurement Teams: Berlin-based start-up Mercanis has successfully raised $10M in a seed funding round led by Signals.VC, DI Technology, and Speedinvest. This AI-powered procurement platform is revolutionizing the industry with its easy-to-use sourcing and supplier management tools, delivering over 40% process cost savings and earning recognition as a Gartner® Cool Vendor. More Here

The scientist behind IBM Watson has raised $60 million for his AI startup in New York: David Ferrucci, the AI researcher who led the creation of IBM Watson, has successfully raised nearly $60 million for his AI startup, Elemental Cognition. The company, which aims to develop AI that "thinks before it talks," offers two enterprise products, Cogent and Cora, that can be utilized across various sectors including financial services and life sciences. With this recent funding, Elemental Cognition plans to continue its mission of bringing reliable reasoning and transparency to the market. More Here

Cybersecurity startup, Project Discovery raised $25M: ProjectDiscovery, a cybersecurity company powered by open-source tools, has announced a $25 million Series A funding round led by CRV. The funding coincides with the launch of ProjectDiscovery Cloud Platform, a SaaS platform that leverages the company's popular open-source tools to help enterprises discover and remediate vulnerabilities at scale. More Here

Legal tech startup, contract raised $8M Funding: The Contract Network, a legal tech startup co-founded by former DocuSign VP Jim Wagner and ex-Blackstone CTO Bill Murphy, has raised $8 million in seed funding. Leveraging generative AI and market data, this platform is revolutionizing contract negotiations. Investors include Tusk Venture Partners, Relativity founder Andrew Sieja, Cooley LLP’s investment fund GC&H Investments, The LegalTech Fund, Mayo Clinic, and Toba Capital. More Here

Blockchain-Harnessing AI Project Jada Receives $25M in Capital: Jada AI, an artificial intelligence project that harnesses blockchain technology, has raised $25 million from alternative investment group LDA Capital. The project aims to offer AI services that aid decision-making for organizations and scale up their operations, according to an emailed announcement shared with CoinDesk. The capital will be used to grow the project’s team of developers and add new organizations. More Here

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