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| Hey Insiders, Today we are taking a look at Outreach's third round of layoffs, why Aleph Alpha's CEO fears Europe may trail in AI development, and Inworld's $30M funding round. I hope you enjoy today's edition! Karan
p/karan-chafekar | |
| 1 | | Sales enablement software company Outreach is performing its third round of layoffs within a year, reducing its headcount by 5%. Outreach currently has 1,000 employees at its Seattle HQ, in addition to Atlanta, Indianapolis, London, and Prague. More: - The staff reduction follows a 7% downsizing in February and a 5% cut in Aug. 2022.
- The company's CEO, Manny Medina, cited lower demand due to layoffs across the tech sector, given that the software operates on a per-user basis.
- Outreach's clients include Zoom, DocuSign, Okta, and Siemens, among others.
- The company's investors include Salesforce Ventures, Spark Capital, Trinity Ventures, and Meritech Capital Partners, among others.
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What the numbers say: German generative AI startup Aleph Alpha's CEO Jonas Andrulis said that Europe "is in a distant third place" in the AI development race, trailing behind the U.S. and China. VCs deployed $10B in European AI startups and $5B in British AI startups in 2022. But that figure pales compared to the $52B deployed in U.S.-based AI startups in the same year. This year, industry leader OpenAI alone nabbed a $10B round from Microsoft. Relevance: European investors have not deployed capital into AI startups at the same rate as the U.S. Investors worry that the region could potentially fall even further behind due to diverse cultures and languages across the continent. Additionally, European regulators are expected to introduce stringent AI regulations next year, which could further hamper AI development. Why it matters: However, the stringent regulations could present a unique opportunity for regional startups that have already adapted to European privacy standards, as several regional corporations are hesitant about using generative AI models launched by foreign companies to protect their intellectual property and sensitive company data from competitors. Regional AI startups Aleph Alpha and Mistral are promising to adhere to the new regulations. On the other hand, OpenAI's CEO, Sam Altman, hinted at the possibility of not operating in Europe if they can't comply with the new regulations, though he later downplayed the statement. | | | |
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| 3 | | AI startup Inworld raised $30M in fresh funding led by Forbes at a $500M valuation. The funding brings its total capital raised to date to $100M. Co-founder and CEO Ilya Gelfenbeyn said, "The financial runway means we can take a long-term view when it comes to supporting the developer community today and stay ahead of the curve in the ever-evolving landscape of generative AI for tomorrow." More: - Lightspeed Venture Partners, Stanford University, First Spark Ventures, Samsung Next, LG Technology Ventures, and others participated in the round.
- The Mountain View, Calif.-based startup's generative AI platform helps game developers create non-playable characters for gaming and other interactive purposes.
Zoom out: - U.S.-based gaming startups have raised $400M in VC funding so far this year.
- At the current rate, funding is unlikely to match last year's total of $3.8B, let alone the record high of over $5B in 2021.
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| 4 | | Serverless Postgres provider Neon announced it raised a $46M Series B led by Menlo Ventures. The startup plans to use the funds on developer experience and artificial intelligence research and development. More: - Neon launched out of stealth mode in May 2022 and turned on billing in March.
- "As users exceed the limits of the free tier, there's a natural path to monetize the platform. This round will allow us to continue scaling our engineering team as well as bootstrap a go-to-market team," said the startup's CEO, Nikita Shamgunov.
- Over 45% of developers use Postgres over MySQL and SQLite, according to the 2023 Stack Overflow survey.
- Neon competes with other relational database products such as Amazon Aurora, Alloy DB, Heroku Postgres, and CockroachDB, among others.
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| 5 | | VC firm Accel is inviting applications for AI and industry 5.0 startups for its Atom 3.0 accelerator program. The firm will invest $500,000 in selected pre-seed and seed-stage startups. The firm is inviting applications from startups across India, Southeast Asia, and the UAE. More: - 24 startups have successfully completed the Atom accelerator program since its launch in 2021.
- Startups that emerged from the accelerator program have collectively raised $160M in funding.
- In addition to providing mentorship, networking opportunities, and capital, the Atom accelerator will also offer perks from partners AWS, Azure, and Google Cloud.
Zoom out: - Accel has backed many notable Indian startups, including Flipkart, Clevertap, Cure Fit, Myntra, Ninjacart, Swiggy, and Urban Company.
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| 6 | | SnoFox, a startup focusing on business intelligence for the global cold chain, emerged from stealth mode with a $4.5M Seed round led by Voyager Ventures. The company seeks to use the funds to expand 10 facilities across seven states using its machine learning products. More: - SnoFox runs refrigeration data through proprietary algorithms to determine points of efficiency without the need for new hardware.
- 78% of cold storage facilities were built before 2000, with the average being 42 years old.
- The company estimates 14% of food produced for human consumption is lost before reaching consumers primarily due to inefficient refrigeration.
- Other participants in the round include Mudcake, Ponderosa Ventures, and Pale Blue Dot.
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- Softbank-backed event ticketing platform DICE laid off an undisclosed number of employees during a recent restructuring.
- Aviation startup Volato plans to go public via a SPAC merger with Proof Acquisition Corp I, a blank check firm formed by PROOF.vc. The transaction will give Volato a valuation of $261M.
- FWD Startups Studio opened applications for the fifth cohort of the FWD Startup Studio Accelerator program, which it runs in collaboration with 1337 Ventures. The accelerator is aimed at insurtech and other startups in adjacent verticals.
- New York-based startup Innovative Rocket Technologies inked a four-year cooperative research and development agreement with the Air Force Research Laboratory to jointly develop rocket propulsion hardware.
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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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