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| Here's a look at today's Startups briefing. - 📝 OpenAI's $51M letter of intent agreement with Rain AI to purchase AI chips.
- 🦄 Veev is the third unicorn startup to collapse in six weeks.
- 💊 Roche to acquire weight-loss medicine maker Carmot Therapeutics for $3.1B.
Thank you. Karan
p/karan-chafekar | |
| 1 | | OpenAI had signed a letter of intent to purchase $51M worth of AI chips from Rain AI in 2019 and could start receiving chips from the startup as early as next October. The non-binding agreement had not been previously reported until WIRED discovered details about the LOI from the deal memo and disclosure documents sent to investors. More: - OpenAI's CEO Sam Altman had personally invested $1M in Rain AI, leading its seed funding round in 2018.
- The San Francisco, Calif.-based startup is developing a neuromorphic processing unit (NPU), an AI chip designed to mimic features of a human brain.
- The NPU chip theoretically offers a 100 times computing power jump for training AI models and a 10,000 times greater efficiency than GPUs, which OpenAI currently uses to run its models.
- The firm has reportedly informed investors that it could reach the milestone of making the chip ready for fabrication as soon as this month.
- Earlier this year, COO William Passo was promoted to CEO after Gordon Wilson transitioned into the executive advisor role.
Zoom out: - Last week, Bloomberg learned that Saudi Aramco's VC fund Prosperity7 exited its stake in Rain AI after being compelled to do so by the Committee on Foreign Investment in the United States, citing national security concerns.
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| 2 | | Modular home builder Veev is the latest unicorn to join a long list of startups that have shut down this year, per CB Insights. What the numbers say: Including Veev, three unicorn startups have collapsed in the past six weeks, with the other two being logistics provider Convoy and health automation company Olive. Collectively, the three startups have lost $2B in equity funding. Veev itself had raised $600M in total funding to date, including a $400M round in Feb. 2022 when it entered the unicorn club with a $1B valuation. 
What happened: The startup had to shut down after a fundraising got pulled out at the last minute. Despite getting commitments for $400M, the firm received only $200M in reality. The remaining sum was supposed to be transferred in Mar. 2023. However, investors announced they would not transfer the remaining sum and recommended an internal fundraising round of $120M. After delays with the internal fundraising, the firm sought a bridge loan from investors. Despite getting initial approvals, investors withdrew their offers and suggested the firm undergo liquidation instead. Relevance: Veev was the second highest-valued startup behind Icon in the modular, prefabricated, and 3D-printed home market. Veev is currently being handed over to an assignee tasked with liquidating the assets. The process is an alternative to declaring bankruptcy. Veev's largest investor and real estate giant, Lennar, has reportedly submitted an offer to acquire the company's assets. | | | |
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| 3 | | Swiss pharmaceuticals and healthcare diagnostics giant Roche Holding AG has agreed to acquire biotech startup Carmot Therapeutics for $3.1B. Roche will pay $2.7B upfront and the remaining $400M subject to reaching certain milestones. The acquisition will help Roche enter the weight-loss treatment sector with Carmot's three experimental medicines for treating obesity and diabetes. More: - Roche was developing its own drug in the GLP-1 class but halted the medicine's development after patients dropped out of the study due to side effects.
- The firm's stock prices surged by 2.2% after the announcement of the acquisition.
- Roche's stocks have dropped more than 15% this year, with the current value giving it a market capitalization of $228B.
- The new weight-loss drugs could catapult Roche into the crowded market, which includes offerings from Pfizer, Wegovy, Eli Lilly, and AstraZeneca.
- The acquisition price paid for Carmot is more than twice its last known valuation of $1.25B from May.
Zoom out: - The weight-loss medicine market is expected to grow to a $100B industry by the end of the decade.
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| 4 | | New York-based hedge fund Luxor Capital Group is set to acquire bankrupt startup Volta Trucks for an undisclosed sum. Luxor Capital had led Volta's Series A, B, and C rounds. More: - The Swedish EV truck maker had 800 employees at the time of the bankruptcy filing, 600 of which were based in the U.K.
- While the firm is acquiring Volta, "the vast majority of those employees lost their jobs and that a small number of staff, who were retained, will keep their roles under the new owner," per the filing seen by Sky News.
- The company had lowered its production forecasts after being left stranded without a battery supplier after its current supplier, Proterra, collapsed.
- Due to the reduced forecasts and lack of battery suppliers, the company could not fetch additional capital.
- Volta reportedly had a total pipeline value of €4.2B ($4.57B), of which it had a pre-order bank of €1.5B ($1.62B).
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| 5 | | EnergyRe, a startup launched by executives from real-estate company Related Cos., bagged $1.2B from a group of European investors to build transmission lines that can carry wind and solar power energy from the generation source to urban areas. $800M of the funding has been provided in the form of equity, with the remaining $400M in debt. More: - European transmission firm Elia Group, Glentra Capital, PKA, and Novo Nordisk Foundation have provided the funding.
Zoom out: - The current power grid is not equipped to handle the growing amount of renewable energy.
- However, new high-voltage transmission lines receive considerable pushback from local residents.
- Per Lawrence Berkeley National Laboratory, 90% of new projects to join the electric grids include wind and solar generating projects.
- EnergyRe also has a $11B project to build a 175-mile underground transmission line to carry power from upstate wind and solar projects to New York City.
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| 6 | | Johnson & Johnson (J&J) MedTech acquired heart implant startup Laminar. J&J will make an upfront payment of $400M. Laminar could receive additional payments in the future subject to achieving certain clinical and regulatory milestones in 2024 and beyond. Laminar will be absorbed into J&J's Biosense Webster division. More: - J&J's shares surged by 1.7% by market close, giving it a market cap of $372B.
- Due to the additional research and development costs associated with the acquisition, J&J lowered its operational and reported adjusted earnings per share by $0.17.
- Laminar, a startup developing a device to eliminate left atrial appendage and prevent strokes, is backed by VC firm Sante Ventures, which led the firm's undisclosed Series A fundraising and is the only institutional investor in the company.
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| 7 | | Quick Hits: - The Kubernetes Cookbook is your comprehensive companion equipping you with the knowledge and techniques to harness the full potential of Kubernetes.*
- Indian edtech startup Byju's billionaire founder Byju Raveendran has offered his two homes and an under-construction villa to borrow $12M, which will be used to pay salaries to 15,000 employees.
- Data processing startup MangoBoost secured $55M in Series A funding led by IMM Investment and Shinhan Venture Investment.
- IA Ventures led a $12M Series B round into a debt collection startup January, joined by Brewer Lane Ventures, Third Prime, Reciprocal Ventures, Upper90, and Shrug Capital.
- Levanta, a Seattle-based startup helping Amazon sellers partner with creators and influencers, raised $1M in fresh funding led by Long Run Capital. The firm crossed $1M in annual recurring revenue earlier this year and is already profitable.
- Toast to 2024: Key affiliate marketing trends to help your campaigns start off on the right foot in the new year. Get the free report.*
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 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Vibha Chapparike | |
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