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| Here’s a look at today’s Startups briefing. - 🚀 SandboxAQ acquired Good Chemistry to solidify its global presence.
- 📈 Valuations of AI startups were much higher than other startups in 2023.
- 🤝 Micromobility startups Tier and Dott are set to merge in a bid to achieve profitability.
Thank you. Karan
p/karan-chafekar | |
| 1 | | AI and quantum computing firm SandboxAQ has reportedly acquired Canadian quantum and computational chemistry startup Good Chemistry. The official financial details of the transaction were not revealed. However, two sources estimate the deal value to be around $75M in a blend of cash and stock. SandboxAQ believes the acquisition will help solidify its global presence within the molecular simulation category by tapping into Good Chemistry's talent, solutions, customers, and investors. More: - SandboxAQ's CEO Jack Hidary said, "Combining forces, we absolutely can serve this market at a bigger scale and with more capability."
- Both the startups were launched in 2022, with SandboxAQ spinning out from Google parent Alphabet while Good Chemistry spun out from quantum computing firm 1QBit.
- SandboxAQ will integrate Good Chemistry's software solutions into its product portfolio.
- Arman Zaribafiyan, CEO of Good Chemistry, is set to join SandboxAQ as the head of product for AI simulation platforms.
Zoom out: - The deal marks SandboxAQ's second acquisition after it acquired cybersecurity and encryption startup Cryptosense in 2022.
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| 2 | | In 2023, investors backed AI startups at higher valuations than their counterparts, per CB Insights. 
What the numbers say: On average, investors paid 21% more for AI startups in the early stages. The disparity kept widening in subsequent rounds, with investors paying 1.5x more for Series B AI startups than non-AI ones. Relevance: Investors' interest in the AI sector surged in 2023 due to the emergence of generative AI, the recent technological advancements in the industry, and the potential for AI to disrupt every other sector. Even corporate investors turned their attention to AI startups, further driving up valuations. AI startups could not only command higher valuations but also bag better deal terms. Despite the AI frenzy, the overall funding deal count for AI startups dropped to 2017's lows. | | | |
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| 3 | | European micromobility startups Tier and Dott have agreed to merge into a single entity. The news comes after both startups were struggling to achieve profitability. However, the combined entity is "well positioned to be EBITDA profitable in 2024," the company informed Sifted. More: - Manager Magazin valued the merged entity at €150M ($164M), which is a fraction of Tier's €2B ($2.2B) peak valuation from 2021.
- Dott's founder, Henri Moissinac, will lead the merged entity as its CEO, with Tier founder and CEO Lawrence Leuschner transitioning into a non-executive chair role.
- Existing investors invest about €60M ($65.6M) into the merged entity.
- Mubadala Capital and Sofina are leading the round, with additional support from Estari, M&G, Novator, and White Star Capital.
Zoom out: - Tier had previously explored acquisition talks with industry rivals Bolt, Lime, and Voi.
- All three deals fell apart after Tier failed to share sufficient documentation and concerns over its financial status, specifically due to its €100M ($109.4M) debt.
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| 4 | | Tyson Foods Inc.'s former CEO, Dean Banks, is set to succeed Ron Hovsepian as the CEO of agtech startup Indigo Ag Inc. Banks takes over the reins after the company recently raised a $270M funding round. More: - Although Hovsepian is stepping down from the helm, he will continue to remain a member of the company's board.
- Indigo Ag specializes in providing farmers with microbial solutions to enhance crop yields and supports them in earning carbon sequestration credits through practices like cover crops.
- Banks said, "Nature-based solutions are the most realistic and practical path to fixing the carbon problems in the world and becoming more sustainable."
- Indigo manages about 10 million acres of farmland across 14 nations.
- In addition to his role at Indigo, Banks is also joining biotech company Flagship Pioneering as a CEO-partner.
- Indigo's latest fundraising was led by Flagship.
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| 5 | | Miami, Fla.-based short-term vacation rental marketplace startup Hear shut down its fractional investment platform on Jan. 3, 2024, "due to the current interest rate environment and economic conditions," the company said in a statement. The company intends to sell all of the properties listed on its website over the next six months. All other business units of Hear are operating as usual. More: - In two years since its launch, Hear has raised $5M in funding from investors, including a $3.5M seed round led by Fiat Ventures in July 2022.
- Other notable backers of the firm include Liquid 2 Ventures, Mucker Capital, Bragiel Brothers, Alumni Ventures, and Gaingels.
- An SEC filing revealed that the company reported a net loss of $56,375 on $276,233 revenue in the six-month period ending June 30, 2023.
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| 6 | | Cash management software maker and registered investment advisor Treasure Financial laid off 14 employees in December, the firm revealed to TechCrunch today. Per Treasure Financial's founder and CEO, Sam Strasser, the move will help the firm "streamline our operations and align our workforce with our current strategic goals and financial realities." The layoffs come just months after the firm reported "explosive growth" despite prevailing market conditions, including the banking crisis and heightened interest rates. More: - In August 2023, Treasure Financial reported it had doubled the number of clients to 300 and assets under management to $500M.
- The fintech startup is providing severance packages and extended health benefits to affected employees.
- Last July, the San Francisco, Calif.-based startup raised a $7.5M funding round led by Venture Capital.
- Before that round, the firm had raised $7M in funding from investors, including PayPal's co-founder Peter Thiel.
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- Humane, the startup behind the AI-powered wearable device Ai Pin, has laid off 4% of its workforce, or 10 employees. Joining the list of departees is CTO Partick Gates, who is transitioning into an advisory role. The restructuring comes as the five-year-old startup gears up to ship its first device in March.
- Customer service software solutions provider Zendesk acquired quality management platform Klaus for an undisclosed sum.
- Point-of-sale, kiosk, mobile ordering, and payment solutions firm GoTab is planning to double its valuation with a $50M Series B round.
- Finnish foodtech startup Enifer received a €12M ($13.2M) grant from the EU's NextGeneration EU program. The firm will use the proceeds to build a large-scale manufacturing facility for mycelium (fungi).
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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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