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| Hey Insiders, Today we are taking a look at why a California congressman is urging the Labor Sec to investigate Deel, why 68% of Israeli startups are relocating abroad, and A-Alpha Bio's $22.4M funding round. I hope you enjoy today's edition! Karan
p/karan-chafekar | |
| 1 | | A group led by Californian congressman Adam Schiff urged U.S. Labor Secretary Julie Su to investigate HR startup Deel for misclassifying its employees as contractors. In the letter addressed to Su, Schiff alleges that Deel classified a significant share of its employees, including senior managers and CEO Alex Bouaziz, as independent contractors to maximize profitability. More: - Deel's spokesperson Elisabeth Diana refuted the claims, adding that an "overwhelming majority" of its U.S. workforce are full-time employees.
- The current move comes less than a month after California Senator Steve Padilla (D-San Diego) urged the state's Labor and Workforce Development Agency to open a state-level investigation into the matter.
- The HR services startup was valued at $12B at its peak and has raised nearly $700M in funding from investors, including Andreessen Horowitz and Emerson Collective.
Zoom out: - Independent contractors are exempt from standard employment protections and are subject to less oversight than their full-time colleagues, which allows the business to save money.
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What the numbers say: A survey of Israeli startups founders and VC fund managers done by Start-Up Nation Capital showed that 68% of startups had started taking active legal and financial steps to relocate their businesses overseas in light of the economic risks posed by the recent judicial reform legislation and the resulting civil unrest in the nation. Startups have started taking proactive measures such as transferring cash overseas, relocating headquarters outside Israel, moving employees, and conducting layoffs. Relevance: 22% of respondents in the survey confirmed that they had started transferring cash outside Israel. 37% of the investors participating in the survey confirmed that portfolio companies had started the same process. 8% of respondents had started the process of relocating their headquarters outside Israel, with 29% more expecting to follow suit shortly. What happened: With the current geopolitical volatility in the nation, only 6% of the respondents expect to see signs of VC investment recovery in the nation within the next six months. This contrasts starkly with respondents' view on the U.S., with 38% believing that VC investments have already started recovering, with an additional 27% expecting a recovery over the next six months. | | | |
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| 3 | | A-Alpha Bio, a Seattle-based biotech startup, raised a $22.4M Series A extension led by recurring investor Perceptive Xontogeny Ventures. The company uses machine learning to analyze a database of 500 million protein interaction measurements. More: - A-Alpha's tech works through engineered single-celled yeasts that fuse, making interactions identifiable through computation.
- "Machine learning successes across the industry (like DeepMind's AlphaFold) are valuable proof-points for the power of machine learning applied to biological problems and drive considerable interest into companies like ours," said the startup's CEO, David Younger.
- Younger and CTO Randolph Lopez spun out the company from the Institute for Protein Design at the University of Washington in 2017.
- A-Alpha last raised a $20M Series A led by Madrona in Sept. 2021 and received a $2.4M grant from the Department of Defense in May 2023.
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| 4 | | Climate tech startup Dioxycle announced it raised a $17M round co-led by Breakthrough Energy Ventures and Lowercarbon Capital. The company is developing an electrolyzer that converts water and carbon dioxide into ethylene. More: - "The tricky thing with this technology is working on a way to make this conversion as energy-efficient as possible because that's what increases the costs of your reaction. Electricity will account for around 50% of your cost, in fact, so that's huge," said the startup's co-founder and CEO, Sarah Lamaison.
- Dioxycle plans to use the funds to develop an industrial prototype in France.
- The startup also plans to leverage incentives from the Inflation Reduction Act and the Bipartisan Infrastructure Law to sell ethylene to American companies.
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| 5 | | Sanguina, a biotech startup based in Peachtree Corners, Georgia, announced a $2.8M Series A led by Veritus Holdings. The company works on at-home testing and blood health management. More: - Sanguina's product, the AnemoCheck app, estimates hemoglobin levels to help users manage anemia.
- The startup also develops approved by the FDA point-of-care tests for anemia, which it expects to make available for at-home testing this year.
- The round also included participation from George Hornig, managing partner and co-founder of The Seed Lab.
- Anemia impacts 1.6 billion people, often co-existing with chronic conditions.
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| 6 | | Crypto infrastructure technology startup Ramp Network opened an office in Brazil. The firm will offer crypto trading, non-custodial on-ramp, and crypto to fiat off-ramp solutions to the region's Web2, Web3, gaming, and crypto wallet companies. The firm's new office is the first step of its broader ambition to expand across Latin America. More: - Last December, Brazil passed a law to grant "virtual service provider" licenses to crypto startups.
- The regulatory clarity, along with the fact that Brazil has the seventh-highest crypto adoption rate made the nation a prime target for expansion.
- The firm will integrate the Brazilian government's payment system Pix into its products.
- Ramp last raised a $70M Series B funding co-led by Mubadala Capital and Korelya Capital in Nov. 2022.
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| 7 | | Quick Hits: - Invest in Virtuix before they ship their VR treadmills to their waitlist, a $100M opportunity. This opportunity ends on 8/10.*
- AI startups OpenAI and Anthropic are creating an industry body called Frontier Model Forum along with tech giants Google and Microsoft. The initiative aims to put safeguards in place to promote responsible AI models.
- Warner Bros. Discovery launched a new accelerator program, Collider On The Lot, in partnership with venture fund Acme Innovation. The accelerator will back media startups working on increasing engagement, leveraging emerging technologies to improve production, and enhancing the digital experience.
- A new AI startup, Channel 1 News, is using generative AI to develop a personalized newscast. The product will launch later this year, giving users a 30-minute weekly show made available through a FAST channel.
- Eyewear brand EssilorLuxottica acquired Israel-based integrated hearing aid technology startup Nuance Hearing for an undisclosed sum.
- Discover how collagen helps reduce loose skin, deep wrinkles, and dark spots.*
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INSIDE STARTUPS LEADERBOARD (7 DAYS) |
 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot.
Nicolas is a Sr. Analyst at Inside, covering startups and transportation trends. He is an avid map maker and data nerd. Nicolas has worked in the shared-scooter space, as well as advised e-bike and moped start-ups. | | This newsletter was edited by Vibha Chapparike | |
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