Y-Combinator Backed its First Defense Startup & Telegram CEO Pavel Arrested In France Airport

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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

Y Combinator backs Ares Industries, its first defense startup, aiming to create low-cost cruise missiles. The company claims to offer DoD capabilities in a smaller, cheaper package and plans to deliver systems by mid-2025. YC's move into defense tech follows the success of Palantir, known for its work with the U.S. military and other government agencies.

Pavel Durov, the founder of Telegram, was arrested at Le Bourget airport in Paris, reportedly due to an investigation into the platform's moderation practices. The arrest has sparked a strong reaction, with Russia warning France to respect Durov's rights and Elon Musk criticizing the situation as an attack on free speech in Europe. Telegram defended its compliance with EU laws, while the investigation is being led by France's cybersecurity and anti-fraud police units. If convicted, he might faces 20 year of prison.

Other Major News

• VCs are so eager for AI startups, they’re buying into each others’ SPVs at high prices. (Scroll To Venture Capital Updates)

• Bolt's Bold Gambit: Founder's Return, $450M Raise, and a $14B Valuation Shakeup. (Scroll To Startups Updates)

• Softbank backed Indian Startup Swiggy looking for $15 Billion IPO.. (Scroll To Startup Updates)

• Meta just canceled its Vision Pro competitor. (Scroll To Tech Updates)

• Don’t Include Your Startup Valuation Number On The Slide.. (Scroll To Featured Article)

• Build your fundraising pitch deck with the help of Venture Daily Digest’s expert team. (Scheduled a call with us)

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🗞️ Startup Funding Updates

Sorella Labs, a San Francisco, CA-based crypto startup advancing tools to identify MEV activities and process Ethereum blocks, raised $7.5M in funding. The round was led by Paradigm with participation from Nascent, Uniswap Ventures, Robot Ventures, and Bankless Ventures. More Here

Trace Machina, a San Francisco, CA-based company building simulation infrastructure for safety-critical technologies in physical-world AI, raised $4.7M in Seed funding. The round was led by Wellington Management with participation from Samsung Next, Sequoia Capital Scout Fund, Green Bay Ventures, and Verissimo Ventures. Angel investors included Clem Delangue, CEO of Hugging Face; Mitch Wainer, Co-Founder of DigitalOcean; Gert Lackriet, Director of Applied Machine Learning at Amazon; and other industry leaders from OpenAI and MongoDB. More Here

Eruditus, an Indian edtech startup based in Mumbai, collaborates with global universities to provide executive education programs for businesses and individuals. The company is in advanced talks to raise about $150 million in new funding, potentially led by TPG, which would value the company at up to $2.3 billion. Eruditus is backed by notable investors including Chan Zuckerberg Initiative, Prosus Ventures, Accel, SoftBank, Canada Pension Plan Investment Board, and Peak XV. More Here

TickPick, a NYC-based event ticket marketplace, raised $250M from Brighton Park Capital. More Here

Fabrication Bazar, a New Delhi, India-based provider of an asset-light tech enabled manufacturing platform, raised $3M in Pre-Seed funding. The round was led by Physis Capital, with participation from Japan based Venture Capital ICMG and existing investor Inflection Point Ventures. More Here

Flowit, a Zurich, Switzerland-based startup leveraging a digital coach for personnel development, closed a €4.2m seed funding round. The round was co-led by Vi Partners and Alstin Capital, funds of Carsten Maschmeyer, with participation from Daniel Gutenberg. More Here

Otto, a Seattle, WA-based startup building an intelligent and autonomous AI travel agent for business travelers, raised $6M in Seed funding. The round was led by Madrona Ventures. More Here

Openwater, a Newark, CA-based provider of a healthcare platform, raised $100M in total funding. Backers included Plum Alley Ventures, Khosla Ventures, BOLD Capital Partners, Esther Dyson, Peter Gabriel, among others. More Here

Depot, a Portland, OR-based provider of a build acceleration platform, raised $4.1M in Seed funding. The round was led by Felicis, with participation from Y Combinator, Aviso Ventures, Tokyo Black, and angels. More Here

Credbull, a Nassau, Bahamas-based onchain private credit fund manager, raised $5.2M in funding. The round was led by GnosisVC, with participation from Outlier Ventures, HODL Ventures, LucidBlue Ventures, CryptoHedge, Marcello Mari (Founder of SingularityDAO), and other investors. More Here

Deep Fission, a Berkeley, CA-based nuclear energy company, raised $4M in funding. The round was led by 8VC. More Here

WealthMore, based in the United States, is an investment platform that connects customers with adviser-led portfolios, licensed wealth advisers, and financial planning services with a $5,000 minimum investment. Founded by Mical Jeanlys-White, the company recently raised at least $1 million in a pre-seed round led by Emmeline Ventures, with participation from a16z TxO, the BFM Fund, and First Row Partners. More Here

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📰 Venture Capital Updates

Andrew Ng is stepping down as CEO of Landing AI, transitioning to Executive Chairman while Dan Maloney takes over as CEO. Ng, with a history at Google Brain, Coursera, and Baidu, seems to be shifting focus to his AI Fund, which recently announced plans to raise $120 million. This executive change may signal more significant news from Ng in the near future.

Venture capitalists are increasingly using special purpose vehicles (SPVs) to sell shares of late-stage startups, particularly AI companies, on the secondary market. Some of these SPVs are commanding premium prices, with markups as high as 30% above the last fundraising round or tender offer for companies like Anthropic or xAI. While this trend allows VCs with direct access to make quick profits and smaller firms to potentially benefit from future success, it comes with significant risks for buyers. SPV owners have less insight into the company's financial health, lack direct voting rights, and miss out on negotiated terms that direct investors enjoy.

📌 Featured Article

Don’t Include Your Startup Valuation Number On The Slide.

There’s one slide that almost every founder gets wrong when they are putting together a pitch deck to raise money from venture capitalists. The slide is usually known as “the ask,” and it typically lives toward the end of the pitch deck.

It is meant to do something pretty straightforward: Explain how much money a startup is raising and for what. It shouldn’t be rocket science, but it’s almost universally a struggle to get right.

Here are the most common mistakes:

1. Forgetting to include the slide altogether.

2. Not naming a specific dollar amount you are raising.

3. Including a valuation on the slide.

4. Omitting what the funds will be used for.

5. Listing a specific runway, i.e., “This will keep us running for 18 to 24 months.”

Let’s explore in detail why these mistakes are so detrimental to your fundraising process and how you can best include these points in your deck.

Include the slide

Obviously, the easiest way to fail on this slide is to forget to include it altogether. That’s a mistake. The whole purpose of doing a fundraising process is to raise money, so you may as well go all-in with a clear ask.

Name a specific dollar amount

Quite a few founders are against including any amount at all. The logic, they argue, is that there are so many different ways to build the company. If they raise $3 million, they go down one path. If they are able to raise $5 million, they go down another. If the fundraising doesn’t go as smoothly as they hoped, and they’re only able to scrape together $1.5 million, they’ll make that work, too.

It’s good to be scrappy and adaptable as a founder, but you need a Plan A: What, in your opinion, is the right amount of money to raise to get the company to the next stage of growth and the next round of funding? Of course, it’s possible that your lead investor wants to push you toward raising more or less than that, but you need to have a solid picture of how you’re going to get from where you are today to where you want to go.

Don’t list a range. Don’t mention that you have 28 different plans for how to make your company successful. The investors are going to want to see that you can be decisive and strategic. Make your Plan A, stick a dollar amount on it, and put that dollar amount on your “ask” slide.

In other words: If you are raising a seed round now, think about what you need to prove to your investors to be able to raise a Series A next. Map all of that out and determine what resources you need to get there. That’s how much money you need if everything goes to plan. Add 30% to 70% as a safety buffer (depending on how good your planning is and how predictable your business is), and that’s how much money you need to raise.

Don’t include a valuation

We haves shared in detailed writeup in our Venture Curator newsletter, Check out here…

📑 Startup’s Latest Buzz

Acquisition & Going Public

Revnest, a Boise, ID-based marketplace for buying and selling vacation homes, acquired Hungry Robots, LLC, a real estate data provider.

Dropbox has acquired AI-powered scheduling tool Reclaim.ai, which serves over 320,000 users worldwide and is backed by investors like Calendly and Index Ventures. The entire Reclaim.ai team will join Dropbox.

Layoffs & Bankruptcy

Cisco has announced a second round of layoffs this year, planning to cut 7% of its workforce after letting go around 4,000 employees in February. Affected employees will not be notified until September 16, leading to frustration and a reportedly toxic work environment. Despite lower-than-expected earnings, CEO Chuck Robbins received $31.8 million in total compensation for 2023.

Startups & People

Bolt, a one-click checkout startup founded by Ryan Breslow, is seeking $200 million in equity and $250 million in "marketing credits" at a $14 billion valuation. The controversial deal includes a pay-to-play provision potentially forcing existing investors to reinvest or lose their stakes. Breslow, who stepped down as CEO in 2022 amid allegations of misleading investors, may return to lead the company if the deal goes through. The proposed transaction has faced industry skepticism due to Bolt's recent controversies, unusual deal terms, and Breslow's ongoing legal battle with an investor over a $30 million loan.

Swiggy, backed by SoftBank, is preparing for an IPO targeting a $15 billion valuation to raise $1-1.2 billion, potentially making it one of India's largest IPOs this year. The funds will primarily expand its quick commerce Instamart business, despite the segment being currently loss-making. Swiggy competes with Zomato, which has a market valuation of around $28 billion.

🤖 Latest In Emerging Tech

Meta cancels La Jolla, its high-end mixed reality headset project intended to rival Apple's Vision Pro. Development halted due to high costs, particularly MicroOLED displays, making it challenging to meet the $1,000 price target. Despite this setback, Meta continues work on other mixed reality technologies, including a more affordable Quest headset and new AR glasses.

Two former OpenAI researchers, Daniel Kokotajlo and William Saunders, criticized OpenAI for opposing California's AI safety bill, SB 1047, despite previous calls for regulation. They urged Governor Gavin Newsom to sign the bill, expressing disappointment in their former employer's stance. OpenAI defended its position, advocating for AI safety regulations at the federal level instead.

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