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| Here's a look at today's Startups briefing. - 👥 Flexport is planning another round of layoffs.
- 📦 VC funding dip for logistic tech startups has exacerbated challenges.
- 🚤 Founder Piotr Zin revived the electric speed boat startup Zin Boats.
Thank you. Karan
p/karan-chafekar | |
| 1 | | Logistics startup Flexport is planning to lay off 500 employees, or 20% of its staff. This is Flexport's second round of layoffs after it slashed 20% of its workforce last October, a month after founder Ryan Peterson returned as the CEO, succeeding former Amazon executive Dave Clark. The current round of layoffs is a part of Peterson's dramatic changes aimed at bringing the business back to profitability by Q4 2024. More: - Earlier this month, the firm secured $260M in funding from e-commerce firm Shopify through uncapped convertible notes.
- Flexport reached a peak valuation of $8B in February 2022 after receiving $935M in fresh funding from Andreessen Horowitz, MSD Partners, and SoftBank Group's Vision Fund.
- The freight forwarding startup has struggled to be profitable due to declining freight rates.
- Despite a dip in revenues, the company continued making acquisitions last year.
- It acquired Shopify's logistic assets, including fulfillment delivery firm Deliverr and warehouses, in May.
- In November, it purchased fallen digital freight startup Convoy's technology for an undisclosed sum.
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| 2 | | Logistic tech startups raised $780M in VC funding in Q4 2023, per Pitchbook data reviewed by the Wall Street Journal. 
What the numbers say: The funding tally for the last quarter was a fraction compared to the $5.2B invested in the same quarter two years ago. Q4's tally brings 2023's annual total to $3.8B. The logistics tech industry was already reeling from weak freight volumes and high interest rates. Challenges have been further exacerbated due to the dip in VC funding. Relevance: The economic headwinds have forced logistics tech companies to cut costs and lay off employees. Earlier this month, warehousing and logistics startup Flexe laid off 38% of its workforce or 99 employees. This was Flexe's second round of layoffs in less than six months, with the firm letting go of 131 employees last September. Freight tracking service startup FourKites laid off 15% of its workforce, or 30 employees, last month. Where to see the impact: Startups with weaker balance sheets and mounting losses have been forced to shut down. One of the most prominent victims of the current conditions was digital freight broker Convoy, which shut down in October 2023. The G Squared-backed startup was once valued as high as $3.8B. | | | |
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| 3 | | Indian edtech startup Byju's is looking to raise $200M through a rights issue funding round. Byju's, once touted as India's most valuable startup, has lowered its valuation by 99% from its peak of $22B to between $200M and $250M, sources informed TechCrunch. More: - In a letter addressed to shareholders, founder Byju Raveendran mentioned that he and other founders have invested about $1.1B of their own money into the startup in the last 18 months but need additional shareholder support to keep the company afloat.
- To date, the firm has raised $5B in equity and debt funding from Peak XV, Lightspeed, Chan Zuckerberg Initiative, BlackRock, Prosus Ventures, B Capital, and other investors.
- Byju's was close to raising $1B in funding last year, but investors backed out at the last minute after the startup's auditor, Deloitte, and three board members resigned.
- Instead, the startup had to settle for a $150M round from Davidson Kempner.
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| 4 | | Founder Piotr Zin revived electric speed boat startup Zin Boats, which went on hiatus when the COVID-19 pandemic hit in 2020. The firm raised $1.275M in seed funding. While the firm has kept future plans confidential, it has outlined milestones it aims to achieve this year. More: - The Seattle-based company was working on filling orders for its proof-of-concept machine when the pandemic hit.
- During the hiatus, the company continued its learning and development efforts for its electric carbon fiber-based boat dubbed Z2R.
- The leadership team includes Zin as CEO, David Donovick as president and COO, Ross Carmichael as VP of engineering, and Pat Walker as VP of manufacturing.
Zoom out: - The global electric boat market is expected to become a $5B market by 2022 and double that by 2030.
- Several startups are vying to be leaders in the space, including General Motors-backed Pure Watercraft and X Shore.
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| 5 | | VC funding for startups in Raleigh fell by more than 70% to $1.2B in 2023, per Pitchbook data reviewed by Axios. The slump was almost double the 37% YoY dip seen across North America. More: - On-demand car servicing startup Spiffy's CEO Scot Wingo said that fundraising slowed down massively in the second half of last year.
- Due to the strong economic headwinds, several Raleigh-based startups had to conduct layoffs, including Epic Games and Pendo.
- Healthcare-focused data and AI startups were a bright spot amidst the tough fundraising environment. AI startup Pyron raised $100M, and pharmaceutical firm Pathalys Pharmaceutical secured $150M from investors last year.
- Bull City Ventures' general partner Jason Caplain expects the challenging conditions to persist until the latter half of 2024, after which the environment could improve as interest rates come down and the number of IPOs rise.
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| 6 | | Regulatory and compliance software developer Thentia extended its Series B funding round by $38M. First Ascent Ventures, Spring Mountain Capital, BDC Capital, and Espresso Capital led the funding round. The company will use the proceeds to invest in AI, scale operations, expand team size, and venture into new markets. More: - The Canadian firm had already started expanding in the U.S. and set up a regional office in Oklahoma after raising a $10M Series B1 funding round led by Spring Mountain Capital and BDC Capital in April 2022.
- At the time of the funding, it had a presence across 15 states in the U.S.
- The startup offers Thentia Cloud, an ERP offering that consolidates regulatory functions, and Data Migration Accelerator, a data management and cloud data migration tool.
- CEO Julian Cardarelli highlighted the company's plans to start offering "industry-altering advancements" this year.
- The latest capital infusion brings the firm's total funding raised to date to $75.5M.
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- Chinese startup Learnable.ai is in talks with investors to raise $70M (500M yuan) to overhaul the annual college entrance exam systems of the nation.
- Thailand is planning to launch a Unicorn Factory initiative to help local startups scale up, connect them with VC firms, and facilitate international growth.
- Chipotle founder Steve Ells' new plant-based fast food startup Kernel is planning to open its first automated kitchen next month.
- Deloitte Canada acquired startup consulting firm Flow for an undisclosed sum. All of Flow's 15 employees will join Deloitte's Global Innovation and Investment Incentives practice, with CEO Elaine Coopersmith leading the program as a director.
- Japanese consumer electronics giant Sony inked a strategic partnership with South African video gaming startup Carry1st. The duo will partner on various commercial opportunities.
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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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