Y-Combinator Michael Seibel Big Statement & EV Startups Facing Bankruptcy

👋 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!

• Techstars' $80 Million Diversity Fund Struggles Amid Tensions with J.P. Morgan.

• Michael Seibel is stepping down as Y Combinator's managing director.

• EV startups like Fisker, Rivian, and Lucid, had banked on much faster EV adoption rates and are now facing potential bankruptcy.

• India has walked back its recent advisory requiring government approval before launching AI models.

• The House bill mandates ByteDance to sell TikTok within six months due to national security concerns.

• Featured Article : When Should You Raise Funding For Your Startup?

• Daily Digest Board: What is your opinion on the CTO of OpenAI not being aware of the specific training data used for the AI video generator Sora?

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STARTUP FUNDING UPDATES

Abu Dhabi's sovereign wealth fund ADIA is in talks to back Indian audio-storytelling platform Pocket FM in a large funding round, following Pocket FM's recent $100 million raise from Lightspeed Venture Partners. Pocket FM has seen rapid revenue growth, exceeding $160 million ARR, driven by its expansion into the US and pay-as-you-go model. More Here

IO River, a Tel Aviv, Israel-based provider a multi-CDN-as-a-Service platform, raised $5.4M in funding. The round was led by S Capital with participation from Aryeh Mergi (co-founder of XtremIO, M-Systems and Jeeng) and Ronni Zehavi (co-founder of HiBob and Cotendo). More Here

Sealed, a New York-based residential energy efficiency startup, raised $30M in funding. The round was led by Keyframe Capital with participation from Cyrus Capital, CityRock, Fifth Wall, and others. More Here

PPRO, a London, UK-based local payments platform, completed a dual tranche funding round totalling €85m. The funding was provided by new and existing investors, including Eurazeo, HPE Growth, Sprints, PayPal Ventures, J.P. Morgan, Citi Ventures, and funds managed by BlackRock. More Here

ThinkSono, a London, UK-based medical technology company specializing in ultrasound AI guidance solutions, raised £2.1M in funding. The round was led by id4 ventures, with participation from Brandenburg Kapital, Calm Storm Ventures, Dubai Angel Investors, CrowdCube, and Cur8 Capital as well as multiple angel investors and clinicians in vascular surgery. More Here

DraftWise, a NYC-based provider of a AI-powered contract and negotiation platform for lawyers, raised $20M in Series A funding. The round was led by Index Ventures, with additional support from existing investors Y Combinator and Earlybird Digital East Ventures. More Here

Bone Health Technologies, a Redwood City, CA-based health technology company, raised $5M in funding. The round saw participation from Esplanade Ventures, Berkeley Catalyst Fund, as well as strategic investor and medical technology provider Terumo Medical. More Here

Luminary Cloud, a San Mateo, CA-based cloud-native, computer-aided engineering (CAE) software provider, raised $115M in funding. The round was led by Sutter Hill Ventures. More Here

Lily AI, a Mountain View, CA-based provider of a retail technology platform specializing in AI solutions for retailers and brands, raised $20M in Series B-1 funding. The round, which brought the total amount to $62M, was led by Conductive Ventures with participation from new investors Counterpart Ventures, Cendana Capital, and Transform Capital, and existing investors Canaan, Sorenson Capital, and NEA. More Here

Clique, a San Francisco, CA-based infrastructure company empowering data computing for blockchains, raised $8M in Series A funding. The round was led by Polychain Capital, with participation from Bankless, Robot Ventures, Santiago R. Santos, Balaji Srinivasan, and other angels such as the founders of Lido, Polygon, Scroll, Berachain, Monad, Gitcoin, Axiom, Succinct, and Uniswap Foundation. More Here

Omni, a San Francisco, CA-based provider of a business intelligence platform, raised additional $20M in funding. The round was led by Theory Ventures. More Here

Berachain, a Cayman Island-based developer of an Ethereum-compatible, high-performance blockchain designed for financial applications, raised $69m in funding. The round, which valued the company at $1.5 billion, was co-led by Brevan Howard Digital and Framework Ventures. More Here

Relation Therapeutics, a London, UK-based biotechnology company leveraging computational and experimental approaches to drug discovery, raised $35M in Seed funding. The round, which brought the total amount to $60M, was led by DCVC and NVentures, with participation from initial seed lead Magnetic Ventures, existing investors Khosla Ventures, and Abcam founder Jonathan Milner, and new investors ARK Invest and Deerfield Management Company. More Here

Paylode, a Miami, FL-based company that provides, manages, and monetizes perks programs for their customers, raised $5.5M in Seed funding. The round saw participation from Susa Ventures, Vinyl Capital, Struck Capital, Day One Ventures and others. More Here

Pure Lithium, a Charlestown, MA-based lithium metal battery technology company, raised $15M in Series A funding. Oxy Low Carbon Ventures made the investment. More Here

X-Therma, a San Francisco, CA-based biotechnology company developing a platform for regenerative medicine and organ preservation, raised $22.4M in Series B funding. The round was led by Starling Locke Capital and Lorea, along with participation from new and existing investors. More Here

Fluent Metal, a Cambridge, MA-based company developing production-grade liquid metal printing technology, raised $3.2M in funding. The round, which brought the total amount to $5.5M, was led by E15 with participation from Pillar VC. More Here

VENTURE CAPITAL UPDATES

Techstars' Diversity Fund Struggles Amid Tensions with J.P. Morgan

Techstars' $80 million Advancing Cities Fund, launched in 2022 with J.P. Morgan to back underrepresented founders, has faced significant challenges. Tensions arose due to differing definitions of diversity, with J.P. Morgan wanting a focus on Black, Latino, Indigenous, and Pacific Islander founders, while Techstars used a broader definition. Targets for diverse founder percentages were often missed, and J.P. Morgan raised concerns over program management, inappropriate events, and staff turnover. With the partnership expiring in December 2024 and the fund only two-thirds deployed, the future of the Advancing Cities programs and associated staff remains uncertain as Techstars struggles to address J.P. Morgan's concerns or find a new funding partner. More Here

Westbound Equity Partners, a Menlo Park, CA-based early stage venture capital firm, closed its second fund, at $100m. Formerly known as Concrete Rose, Westbound focuses on capitalizing underrepresented founders, investing in companies serving underrepresented consumers, and helping early stage companies build diverse teams. More Here

FEATURED ARTICLE

When Should You Raise Funding For Your Startup?

For some founders, it is enough to have a story and a reputation to raise successful funding. However, for most, it will require an idea, a product, and some amount of customer adoption, a.k.a. traction.

And one of the most common mistakes that founders make is 'jumping into fundraising when the business is not ready. What does it mean?

Investors write checks when the idea they hear is compelling, when they are persuaded that the team of founders can realize its vision and that the opportunity described is real and sufficiently large. When founders are ready to tell this story, they can raise money…..Read More Here

STARTUP’S LATEST BUZZ

ACQUISITION & EXITS

Global consultancy Bain & Company acquired PiperLab, a Madrid, Spain-based provider of artificial intelligence (AI) and machine learning (ML) solutions. More Here

Virtuos, a Singapore-based video game development company, acquired Beyond-FX, a Los Angeles, CA-based visual effects (VFX) studio. More Here

PSQ Holdings, Inc. (NYSE: PSQH), a marketplace of patriotic businesses and consumers, acquired Credova Holdings, Inc., a point-of-sale financing platform providing Buy Now Pay Later (BNPL) solutions catered to the shooting sports and firearms industries. More Here

LAYOFFS & BANKRUPTCY

Textio, a 14-year-old company uses AI to help businesses write better job listings, emails, and other workplace communications, laid off 14 employees or 16% of its workforce. More Here

STARTUPS & PEOPLE

Michael Seibel is stepping down as Y Combinator's managing director to be a group leader mentoring founders directly, reflecting a refocus on the accelerator's core mission under new president Garry Tan. Tan has reduced batch sizes, discontinued later-stage investments, and distanced YC from controversial stances amid scrutiny of tech's power and San Francisco's social tensions. Seibel, an influential African American entrepreneur and investor, says he prefers hands-on mentorship over management. More Here

“EV sales growth is slowing down, falling short of automakers' and startups' optimistic projections, as mainstream consumers remain hesitant due to concerns over charging infrastructure, repair costs, and resale value. This sluggish adoption pace is putting immense financial strain on recently launched EV startups like Fisker, Rivian, and Lucid, which had banked on much faster EV adoption rates and are now facing potential bankruptcy, plummeting valuations, and the need to scale back production plans. In contrast, sales of hybrid vehicles are surging, benefiting companies like Toyota that had warned about a more gradual transition to EVs.” Ex-Ford CEO. More Here

Uber and Lyft are threatening to leave Minneapolis after the city council approved a minimum wage law i.e. $15 per hour for ride-hailing drivers, which the companies argue will make rides unaffordable. The companies are expected to push for a state law to overturn the city's ordinance amid growing tensions over gig worker pay. More Here

LinkedIn, owned by Microsoft, is reportedly planning to introduce puzzle-based games to its platform, akin to Wordle, allowing users to compete with colleagues based on workplace scores. The initiative aims to foster fun, deepen relationships, and encourage conversations within the professional network. No release date has been confirmed yet, but the project signifies LinkedIn's efforts to engage and retain its user base beyond job searches. More Here

The House bill mandates ByteDance to sell TikTok within six months due to national security concerns. Senate debates focus on potential First Amendment violations and constitutional adjustments. If passed, the law would prohibit distributing ByteDance apps without divestment, facing hurdles like antitrust scrutiny and Chinese opposition, potentially leading to legal challenges and extensions. More Here

LATEST IN EMERGING TECH

SpaceX's Unusual Equity Terms Over ESOP

SpaceX requires employees to agree to unusual equity terms. The company can buy back vested shares if employees leave and ban them from tender offers for "dishonesty." Employees often aren't aware of the "dishonesty" clause initially. The terms give SpaceX control over when employees can cash out equity, even after leaving. SpaceX's disclosures highlight risks tied to CEO Elon Musk's actions and a potential lack of public market for its stock. More Here

India has walked back its recent advisory requiring government approval before launching AI models, after facing backlash. The revised guidelines now ask firms to label unreliable AI outputs instead of seeking pre-approval. However, restrictions on unlawful content, bias, and election threats remain in place. More Here

The FTC has raised questions about Reddit's plan to license user-generated content for training AI models, a new revenue stream valued at $203 million that Reddit disclosed ahead of its IPO. Reddit says it received a letter from the FTC inquiring about its data licensing practices, which have drawn scrutiny over privacy and fairness concerns. More Here

VENTURE DAILY DIGEST PICKS

• ​How to Prove Your Market Is “Big Enough” to VCs? More Here

• AI escape velocity: A conversation with Ray Kurzweil By BVP. More Here

• YC Strategy 'Cash In, Cash Out, Milestones Achieved' To Raise Funding. More Here

• An In-Depth Look at Elo and MMLU Scores for Leading Language Models. More Here

DAILY DIGEST BOARD

HOW CAN I HELP YOU?

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That’s It For Today! Will Meet You Tomorrow!
Happy Monday! 🥂

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✍️Written By Sahil R - The Venture Crew