VC Daily Digest

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📢 Top Venture Capital News

The civil rights movement comes to venture capital: The tech industry's venture capital allocation has always been intertwined with sociopolitical context, a fact that's become increasingly evident with recent lawsuits. The American Alliance for Equal Rights (AAER) is suing Fearless Fund, accusing it of racial discrimination for awarding a $20,000 grant exclusively to Black women-owned small businesses. This comes despite the fact that Black women raise only around 0.4% of all venture capital funds annually. Similarly, the Minority Business Development Agency (MBDA) and the Small Business Administration have faced legal challenges over their race-conscious policies. These cases highlight the ongoing struggle for equity in venture capital, a sector not separate from the economic fabric of our society. More Here

P33 gets $3M to support Chicago's underserved founders: Chicago tech nonprofit P33 received $3 million from the federal Minority Business Development Agency (MBDA) on Friday. The funding will be used to grow its TechRise Expansion Initiative, which supports underserved founders as they go from an idea to scaling a business. More Here

Multicoin Backer L1 Digital Raises $152M for Second Crypto VC Fund: A unique opportunity has arisen for individual investors with Johnson & Johnson's $40 billion exchange offer for Kenvue. By leveraging the "odd-lot" rule, investors purchasing 99 shares of J&J can expect a full allocation of Kenvue, potentially yielding a payoff of over $1,000. This contrasts with larger J&J shareholders who are likely to receive a prorated allocation, underscoring the advantage for smaller investors. More Here

LPs seek recession hedge with PE healthcare funds: A unique opportunity has arisen for individual investors with Johnson & Johnson's $40 billion exchange offer for Kenvue. By leveraging the "odd-lot" rule, those who hold less than 100 shares of J&J stock can secure a full allocation of Kenvue, potentially yielding a payoff of over $1,000. This stands in contrast to other J&J shareholders who are likely to be prorated, thus not receiving a full allocation of Kenvue. More Here

St. Pete investor Gary Cardone leads $12M capital raise for blockchain startup: St. Petersburg fintech investor Gary Cardone is leading a $12 million funding round for New York-based blockchain startup Node40 through his fund, Card1Ventures. Cardone is upsizing his commitment to Node40, which he backed with a $4 million investment in April after regulators recently provided “tremendous clarity” on a path forward for digital assets. More Here

📢 Top Startups News

It’s official: Better.com is going public: In a significant move, digital mortgage lender Better.com's proposal to merge with Aurora Acquisition Corp. via a SPAC has been approved by shareholders. The combined entity is set to receive a minimum of $550 million in new capital from SoftBank, with the possibility of an additional $200 million. Despite facing numerous challenges, including layoffs, executive resignations, and a volatile housing market, Better.com remains committed to its public debut, marking a crucial step in its journey. More Here

Fintech is a mess. Is BaaS the outlier?: The banking-as-a-service (BaaS) sector has experienced a tumultuous year marked by mergers, acquisitions, and layoffs. Despite these challenges, the industry continues to grow, with Accenture's global banking lead, Michael Abbott, describing BaaS as a "potentially phenomenal growth space." The sector is projected to expand by 15% annually, reaching a value of nearly $66 billion by 2030. However, the journey hasn't been entirely smooth, with companies like Synapse and Figure Technologies experiencing significant layoffs. As the industry continues to evolve, it's clear that BaaS is a complex yet promising field. More Here

Startup founders should care more about Serve Robotics’ listing: In an exciting development for the robotics industry, Serve Robotics, a delivery robots maker, is going public via a reverse merger with a blank-check company, raising $30 million just before the deal. This move not only signifies a potential shift in the economics of building, deploying, and running a fleet of delivery robots, but also offers a unique insight into the early stages of companies utilizing robotics for delivery services. Despite recording no revenue in 2021 and a modest six-figure topline in 2022, Serve's decision to go public stems from a need for a broader scope of investors, following a period of financial uncertainty. More Here

5 growth lessons we learned while scaling from $2M to $3M ARR: Scaling a startup is a journey filled with lessons and challenges. One key insight I've learned is the importance of early hiring and consistent investment in marketing. As your startup grows, it's crucial to increase staffing levels in a timely manner to prevent work overload and stagnation. Additionally, allocating 10% of net revenue to marketing is a strategy that can fuel your expansion. Remember, as your revenue increases, so should your marketing spend to support your sales team adequately. More Here

Tech Startups Close or Downsize as Funding Declines by 49%: The startup ecosystem is currently navigating a significant downturn, with a 49% decline in tech startup funding in the year ended June 30, as reported by The Wall Street Journal. This funding drought has led to numerous venture-backed companies, such as Plastiq, Goldfinch Bio, and Buzzer, either downsizing or shutting down. However, amidst this challenging landscape, initiatives are emerging to support startups, including Amazon Web Services' AWS Build program, PHX Ventures' over-subscribed second fund, and a partnership between Airwallex and OurCrowd to simplify startup investments. More Here

📢 Top AI Startup’s News

Middleware raises $6.5M in seed funding to transform cloud observability with AI: Middleware, an AI-driven startup enhancing cloud observability, has successfully raised $6.5 million in a seed round led by 8VC. The funds will be used to expand the team, develop new features, and build an advanced AI advisor to improve cloud observability stack. As more companies transition to cloud-native systems, Middleware's tools are set to become increasingly critical in navigating this new market landscape. More Here

AI regulation is taking shape, but startups are being left out: In the rapidly evolving landscape of AI, accountability is a key concern. If regulations stipulate that AI companies are liable for how their chatbots utilize data and respond to inquiries, firms like Dataiku could potentially face repercussions for elements beyond their immediate control. It's a complex issue that underscores the need for clear guidelines and ethical practices in AI development. More Here

Anthropic releases a faster, smarter, cheaper AI model: Anthropic, the AI startup that's been making waves with its AI model, Claude, has just released an upgraded version: Claude Instant 1.2. This new model leverages the advanced capabilities of Claude 2.0, resulting in significant improvements in math, coding, reasoning, and safety. Not only does it generate longer, more structured responses, but it also outperformed its predecessor in standard benchmark evaluations. The quality of output has improved, and it's been found to be the safest model to use. Businesses and developers can access this new model, which is much less expensive than Claude 2.0. More Here

📢 Top Startup’s Fundraising News

11xAI closes a $2M pre-seed round to create autonomous AI workers: London-based startup 11xAI announces the closing of a $2 million pre-seed round led by Project A Ventures. The company, which develops automated digital workers, aims to revolutionize the workforce by enabling businesses to automate mundane, repetitive tasks. With plans to expand into the U.S. market and launch two more digital workers, 11xAI is on a mission to make AI-powered workforces the norm. CEO Hasan Sukkar believes that in two years, digital workers will be a regular part of how companies around the world operate. More Here

Pet supplement startup, based in St. Louis, raises $11M to expand team, distribution: Native Pet, a St. Louis-based pet nutrition startup that makes and sells all-natural supplements for dogs, plans to expand its operations after raising $11 million from investors. Native Pet said Thursday it has closed on an $11 million Series B funding round led by Cavu Consumer Partners, a consumer-focused investment firm with offices in Santa Monica, California, and New York. Companion Fund, which is affiliated with Mars Petcare, also participated in the financing. More Here

AI and Web3 Startup Moonbox Announces closing of Strategic Round at USD$50million valuation: AI and Web3 startup, Moonbox, has successfully raised $2.5 million in a Strategic Round financing, led by OKX Ventures and others, pushing its valuation to approximately $50 million. The Hong Kong-based company, which recently acquired the licensing rights to produce NFTs with the IP of classic Stephen Chow films, is set to launch a series of AI-powered NFTs and applications by the end of 2023. The investment will be used to accelerate product growth and continue developing its core technology, aimed at building applications powered by the latest AI generative technologies for use in Web3 and NFT applications. More Here

Startup Craftwork raises $4M with Y Combinator backing to expand its effort to modernize painting industry: Local co-founders Tim and Suzanne Griffin recognized personally how the traditional process of hiring a painter to revamp a home can seem outdated. During the height of the pandemic, the couple decided to spruce up their kitchen by painting an accent wall. The process of finding a painter to tackle the project and receiving a quote took longer than they anticipated. More Here

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