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| Here’s a look at today’s Startups briefing. - 🤝 Nvidia partners with SandboxAQ to advance CUDA platform.
- 🔎 Petal seeks buyer amidst financial struggles.
- 🦄 AR startup Rokid becomes a unicorn with a $112M funding round.
Thank you. Karan
p/karan-chafekar | |
| 1 | | Nvidia Corp. is partnering with Palo Alto, Calif.-based AI and quantum computing startup SandboxAQ to expand the capabilities of its CUDA software platform. The partnership aims to advance quantum mechanics simulations, focusing on discovering groundbreaking materials for applications in medicine and battery technology by simulating chemical reactions. SandboxAQ's CEO Jack Hidary believes the partnership will help create new use cases for financial services and energy sectors. More: - SandboxAQ, valued at $4B, spun out of Alphabet and counts former Google CEO Eric Schmidt as a key investor and chairman.
- Schmidt highlighted the transformative potential of quantum computing.
- He added, "SandboxAQ's AI simulation capabilities, augmented with Nvidia accelerated computing and quantum platforms, will help enable the creation of new materials and chemical compounds that will transform industries and address some of the world's biggest challenges."
Zoom out: - SandboxAQ uses quantum algorithms to simulate outcomes.
- Previously, these processes were too computationally intensive for computers.
- However, introducing Nvidia's A100 and H200 processors has altered this landscape.
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| 2 | | In Q3 2023, 18.5% of the funding rounds completed through the Carta platform were down rounds. 
What the numbers say: Down rounds remain consistently above the 18.5% mark for three consecutive quarters, reaching a peak of 19.6% in Q1 2023. In contrast, only 5.2% of the rounds were downrounds in Q1 2022. Relevance: Investors like Pari Passu Venture Partners' managing director Julia Gudish Krieger believes that founders should accept down rounds "as long as you're showing that there are real fundamentals to the business." Gudish Krieger advises founders to focus on the company's long-term growth potential rather than immediate valuation concerns. Valuation repricings are inevitable anyway, as investors mark down their portfolio stakes to reflect the actual value of their assets to limited partners. What happened: Startup valuations have decreased across the entire startup fundraising lifecycle. However, the slump has hit later stage startups the hardest. Median Series D valuation dropped by 50% in Q3 2023 compared to Q1 2022. | | | |
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| 3 | | Credit card fintech startup Petal is on the lookout for a buyer after several months of financial struggles, per Fortune Magazine and Pymnts. An unnamed source claims that "Petal has received multiple acquisition offers." More: - Some sources believe that the firm may shut down without a sale.
- However, other sources suggest that a shutdown is unlikely as the firm still has $55M capital leftover from a previous funding round.
- Additionally, it secured a $200M debt facility in August.
- Due to tough macroeconomic conditions, Petal conducted two rounds of layoffs earlier this year, lowering its employee count by 20% to ~100.
- Petal claims it has issued credit cards to nearly 400,000 customers, of which 100,000 were approved just last year.
Zoom out: - Lending startups like Petal have struggled this year due to high interest rates.
- One VC said, "The cost of capital has been much higher given the macro rate environment, and this puts pressure on lenders' P&Ls."
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| 4 | | Chinese augmented reality startup Rokid entered the unicorn club, touching the $1B valuation mark with a $112M Series C funding round. NetDragon Websoft Holdings Ltd. was the lead investor, contributing $20M to the round. The firm will use the proceeds to expand overseas and explore AR applications in the education sector. More: - NetDragon will help Rokid pursue global opportunities and has signed a 5-year strategic partnership with the AR startup.
- Rokid founder Misa Zhu said that the firm will leverage NetDragon's knowledge, education and gaming expertise, and global sales network.
- Rokid has raised $200M to date from investors, the most notable of which is Temasek Holdings.
- The firm expects revenue from foreign nations to exceed domestic collections in 2024.
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| 5 | | Cross-border payments fintech startup Zazuu has shut down after failing to raise additional funding, per a LinkedIn post published by the firm. The London-based firm last raised a $2M funding round in Jun. 2022 but has been unable to secure further capital since and exhausted all alternatives before deciding to close. More: - Zazuu aimed to improve global remittance services but struggled to alter consumer behavior amid fierce competition.
- Like other fintechs, Zazuu struggled to enter highly fragmented markets and expand globally.
- Though initially gaining traction as a foreign exchange rates chatbot, Zazuu ultimately could not sustain the growth momentum of its cross-border payment services.
- Zazuu served users across North America, Europe, and Africa.
- Notable investors that backed the startup include Founders Factory Africa and Launch Africa.
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| 6 | | 100 tech entrepreneurs, investors, and experts have joined the Founders at the University of Cambridge initiative. The experts will mentor and guide new startups launched by academics and researchers at Cambridge University. More: - Executives from Stripe, Graphcore, FiveAI, Arm, Superhuman, Google, and Balderton Capital have signed up to support the initiative.
- Experts signing up for the initiative collectively represent 100 companies with an estimated value of $15B.
- The group of experts has invested in 800 new startups to date, 47% of which were in the deep tech sector.
- 49% of the experts are female, while a quarter belong to underrepresented and ethnic backgrounds.
Zoom out: - 165 Cambridge tech companies have raised $1.3B in funding between 2022 and 2023.
- The initiative has also received support from strategic partners AstraZeneca, Hitachi Europe, Judge Business School, and KPMG.
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- OpenAI's board of directors ousted CEO Sam Altman and co-founder Greg Brockman. The firm roped in former Twitch CEO and founder Emmett Shear as interim CEO. Meanwhile, Microsoft hired Altman, Brockman, and a few high-profile OpenAI executives to its new advanced AI research team.
- The AWS Emerging Technologies Accelerator has selected 20 startups for its cohort, including Symbiotix Health, Psyrin, Ask Clara, SUN ZU Lab, and Leo CybSec.
- Rocket engine startup Ursa Major is using 3D printing to make solid rocket motors.
- Sustainable EV motor maker Advanced Electric Machines raised £21M ($26.2M) in Series A led by Legal & General Capital and Barclays Sustainable Impact Capital.
- OSS Capital led a $6.4M seed funding round into the workplace productivity platform AppFlowy.
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 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Christopher Hachey | |
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