Ashish Vaswani and Niki Parmar, the authors of the seminal 2017 research paper that popularized the use of large language models in AI, have raised $8M for their new stealth-mode startup, Essential AI. Thrive Capital led the funding round, with participation from Conviction and angel investor Elad Gil, as the company aims to build software for enterprises to use large language models. More: - The company aims to build software for enterprises to use large language models, which have powered generative AI applications such as ChatGPT.
- Other authors on the paper who have also left Google to start their own ventures include Noam Shazeer, who runs AI chatbot startup Character.AI, and Aidan Gomez, who founded large language model startup Cohere.
- Although there is not a lot of detail on the company, which is in stealth mode, it comes at a time when the founders left Adept AI, a company they also founded back in 2021 with a focus on neural network training.
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What the numbers say: Per CBInsights, the median period between funding rounds has increased due to the macroeconomic headwinds. Startups are now taking 26 months between Series C and D stage rounds, nine months more than the previous period of 15 months. The extended fundraising period can be attributed to the VC funding retrenchment, due to which investors are taking longer to conduct thorough due diligence for potential opportunities. What happened: Several startups that raised equity funding recently had to take valuation cuts. At the end of Q4 2022, median valuations of Series C rounds dropped 15% QoQ to $339.3M. Due to lengthened median periods between funding rounds and the possibility of having to raise a down round with a valuation cut, startups were instead raising venture debt — typically raising between 20% to 35% of their latest equity round. Where to see the impact: Taking venture debt rather than equity funding helped several startups avoid layoffs and business failure. However, the situation was further aggravated by the collapse of startup venture debt provider Silicon Valley Bank in March earlier this year. CBInsights predicts this will result in a further slump in startup valuations, increase startup mortality, and intensify layoffs, especially in startups with high cash burn.
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Indian social commerce startup Meesho has cut 15% of its workforce, or 251 roles, in a bid to reduce expenses and achieve sustained profitability. Meesho, whose backers include SoftBank, Prosus, and Sequoia India, is targeting breakeven in 2023 and has recently trimmed its cash burn aggressively. More: - The company offers an online platform for individuals to sell items while managing their backend logistics and tracking order flows.
- This is the second round of job cuts at Meesho after eliminating about 150 roles a year ago.
- Those affected by the layoffs will receive one-time severance payments of 2.5 to 9 months, job placement support, and accelerated vesting.
- Meesho, which is used heavily in smaller cities in India, grew by 10x from 2020 to 2022 and drove a merchandise value of $4.5 billion in 2022.
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Community Investment Management provided a $100M warehouse debt credit facility to Latin American fintech startup R2. The startup aims to use the proceeds "to get to a new stage as a leader in embedded lending, reducing the financing gap for small and medium companies," per co-founder Roger Larach. More: - Fintech R2 provides revenue-based loans and lending infrastructure to SMEs.
- The startup claims to have disbursed nearly $20M to six million SMEs in the region.
- R2 takes back part of the revenue as repayment towards the loans, helping the firm curb delinquencies.
- Notable clients include Clip and Frubana.
Zoom out: - The slump in tech valuations and rising interest rates have made it difficult for companies in the region to avail credit facilities.
- "Banks and underwriters serve small merchants even less" during economic downturns, giving R2 the opportunity to cater to the growing needs of SMEs in the region, says Larach.
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Sweetgreen's chief marketing officer Daniel Shlossman joined food-delivery startup Wonder as its first chief growth and marketing officer. Shlossman will be responsible for marketing, digital, partnership, product strategy, and customer experience. His appointment to the role comes as the startup looks to expand its restaurant kitchens with a new category of delivery kitchens called "fast fine." More: - Wonder already opened up one such kitchen in Manhattan's Upper West Side in February, with plans to establish nine more outlets across New York City.
- The startup, which raised $350M at a $3.5B valuation last year, pivoted its strategy from movable kitchens to fixed locations at the start of this year.
- "All the financial metrics—return on capital, profitability, our ability to scale fast—are much better with the fixed location model," said CEO Marc Lore.
- Shlossman's chief marketing officer role vacated at Sweetgreen will be filled by co-founder and chief brand officer Nathaniel Ru.
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French startup Green-Got raised €5M ($5.4M) in a funding round, with almost €2M ($2.2M) contributed by its community of customers through an equity crowdfunding campaign. The startup is a neo-bank focusing on climate change, ensuring that customers' savings and funds in their accounts are not invested in fossil fuel projects or other polluting industries. More: - Green-Got offers standard banking features, allowing clients to open an account through the mobile app and receive a debit card that works alongside Apple Pay and Google Pay.
- The company offers no free tier and charges a €6 per month subscription model to hold an account, noting they already have 13,000 paid customers.
- This move comes at a time when many consumers, specifically Gen Z, are increasingly focused on the environmental impact of their spending and investments.
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Quick Hits: - The company behind these surgical robots is planning to list on Nasdaq. Last day to fund your investment is on 5/10.*
- Dutch software testing startup Instruqt secured €15M ($16.4M) in Series A funding led by Blossom Capital. This is the firm's first outside funding, as it was bootstrapped for the five years since its launch.
- Seattle, Wash.-based data startup Genemod secured $4.5M in fresh funding co-led by Defy.vc and LDV Partners. The firm is developing a cloud-based platform for life sciences companies and researchers to manage data workflows.
- Men's health-focused startup Bonatra acquired women's health and wellness startup MyAva for an undisclosed sum.
- Brazilian payments solutions startup CloudWalk reached profitability in Q1 2023, reporting $11M in profits against $30M net revenue. CloudWalk's fiscal year revenues at the end of March topped $138M.
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 |  | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot.
Robel is a writer for Inside.com. He was born and raised in the Bay Area but now lives in the Midwest. He is passionate about all things tech, venture, city, and state government, and in his free time enjoys outdoor activities including biking, hiking, and running. | | | | Editor | Vibha Chapparike is a Freelance Writer & Editor at Inside.com. With her post-graduation in Management and Finance completed, Vibha is expanding her knowledge in venture capital, business, startups, and technology. She has had a career in public relations and communications. An ardent reader and writer currently residing in Singapore, you can follow Vibha on Twitter @VChapparike. | |
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