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| Hey Insiders, Today's newsletter covers: - Byju's upcoming layoffs
- Startups diversify banking relationships after SVB and FRB fallout
- AI model testing startup Kolena's $15M funding round
If you find this newsletter useful, please share it with your friends and colleagues. Thank you. Karan
p/karan-chafekar | |
| 1 | | Sources informed TechCrunch that Indian edtech startup Byju's plans to lay off as many as 5,000 employees over the next few weeks. The layoffs are part of a broader restructuring initiative for Byju's, which is under pressure from lenders to cut costs. The layoffs will impact employees in its offline and online departments, as well as the marketing division. More: - Once valued at $22B, Byju's already laid off over 10,000 full-time and contractual employees last year.
- The firm hired Arjun Mohan as the new head of its India business, who "will be completing this process in the next few weeks and will steer a revamped and sustainable operation ahead," per Byju's spokesperson.
Zoom out: - The news comes after a troubled few months for the edtech startup, which is in the midst of a dispute with lenders over the terms of a $1.25B loan.
- Earlier this June, auditor Deloitte stepped down from the board after Byju's failed to submit audited financial statements on time.
- Subsequently, board members representing the three largest investors also resigned from their respective roles.
Q: How can startups avoid overstaffing during growth phases to prevent the need for downsizing during economic downturns? Join the conversation here. |     | |
| 2 | | Startups, on average, now have at least two banking relationships, per a new report from Kruze Consulting. 
What the numbers say: Startups diversified their banking relationships after the fallout of Silicon Valley Bank (SVB) and First Republic Bank (FRB). Before the fallout of SVB and FRB, startups had only one banking relationship on average. Relevance: With rising interest rates, startups are increasingly moving their funds into interest-generating accounts. By Jun. 2023, 30% of startups had put cash in treasuries, up from 10% in Dec. 2022. As a result, startups earned $17,000 in interest by mid-2023 compared to $12,000 per month at the end of last year. Where to see the impact: JP Morgan benefitted the most from the fallout of the two banks, growing its startup market share from 12% to 60% after the acquisition of FRB. Due to the fallout, average deposits continued to drop. Average deposits in SVB dropped from $8.5M to $4M, whereas they dropped from $8.8M to $2.7M for FRB. | | | |
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| 3 | | Kolena, a startup that focuses on measuring the performance of AI models, raised a $15M round led by Lobby Capital. The company works on unit and end-to-end testing for models and identifies gaps in AI model data coverage. More: - "For example, a model with 95% accuracy in detecting cars isn't necessarily better than one with 89% accuracy. Each has its own strengths and weaknesses — e.g., detecting cars in varying weather conditions or occlusion levels, spotting a car's orientation, etc.," said Kolena's CEO, Mohamed Elgendy.
- The startup plans to use the funds to partner with regulators and expand its sales and marketing.
- The round included participation from Bloomberg Beta and Signal Fire.
- Other model testing and validating startups include Prolific, which raised a $32M round, Robust Intelligence, Deepchecks, and Bobidi.
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| 4 | | Indigo Ag, an agriculture technology company, announced it raised a $250M round to expand crop protection to Brazil and Turkey, among other locations. The round reduced the company's valuation by an undisclosed amount from its peak of $3.5B in 2020. More: - "You have to look at the nature of the dislocation in the market. It's a point in time when the board and the investors and the management team took the decision to take some discount because the most important thing is ensuring the company has the cash and liquidity to perform for the customers," said Indigo Ag CEO Ron Hovsepian.
- Originally founded as Symbiota in 2013, Indigo Ag was launched by Moderna co-founder Noubar Afeyan and Flagship Pioneering.
- The company develops seed and crop treatments to increase yields by finding naturally occurring beneficial microbes.
- Despite the drop in valuation, Indigo's net revenue increased by 40% YoY in 2022 and by 90% in the first seven months of 2023.
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| 5 | | Kern Tec, an Austrian foodtech startup, secured a €12M ($12.7M) Series A led by Telos Impact. The company focuses on turning food waste into sustainable ingredients for plant-based products. More: - The startup seeks to reduce the 500,000 metric tons of food waste that end up in landfills in Europe each year.
- Kern Tec uses proprietary processes to extract oils and protein from seeds in fruits such as apricots, plums, and cherries.
- Founded in 2019, the company has processed over 2,500 metric tons of fruit pits at its facility.
- The round included participation by the European Innovation Council Fund and PeakBridge Growth 2.
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| 6 | | Millworks Analytics, a cost analysis platform that helps businesses manage cloud expenses, emerged from stealth with the launch of their flagship product, Calipers. Former Tableau CFO Damon Fletcher co-founded the company along with former colleague Michael Arvold, with the latter also serving as the firm's CTO. More: - Fletcher was inspired to create the cloud cost management platform after witnessing a surge in cloud spend in businesses developing AI tools.
- The newly launched platform can analyze cloud spending across platforms such as Amazon Web Services, Microsoft Azure, Google Cloud Platform, Snowflake, and Datadog.
- Millworks intends to roll out generative AI features to give customers the option to automatically label budget items, predict cloud spend, and optimize cloud expenses.
Zoom out: - Worldwide cloud spend is expected to grow by 21% from $597B in 2023 to $724B in 2024, per a Gartner study.
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- Andreessen Horowitz announced SPEEDRUN, an accelerator for early-stage gaming startups. The accelerator will invest up to $75M in promising startups.
- Pan-African VC firm P1 Ventures held the first close of its second fund at $25M. The firm intends to back seed-stage fintech, e-commerce, healthtech, SaaS, and AI startups across Africa.
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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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