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| Here's a look at today's Startups briefing. - ✂️ Klarna cut down losses by 76% as it gears up for an IPO
- 🌾 Vertical farming Oishii defied the VC dip by raising $134M
- 🕵🏼♀️ SEC is probing whether OpenAI misled investors
Thank you. Karan
p/karan-chafekar | |
| 1 | | Swedish fintech firm Klarna reported annual losses of 2.5B kroner ($241M) in 2023. The firm has narrowed losses by 76% compared to 2022's tally of 10B kroner (~$1B). The buy-now-pay-later solutions provider briefly posted a profit in the third quarter before plunging back into losses in the following quarter. Klarna witnessed a 22% growth in revenue, touching 23.5B kroner ($2.3B) in 2023. More: - The company has not posted a full-year profit since 2019, when it started aggressively expanding in the U.S.
- The U.S. is now Klarna's biggest market, accounting for 37 million out of its 150 million global customers.
- Klarna is gearing up for an IPO listing in the U.S. as early as Q3 2024.
- The firm is targeting a valuation of $20B, about half its peak valuation of $45.6B in 2021.
- Due to heightened interest rates and macroeconomic headwinds, the company's valuation plunged to $6.7B in 2022.
- Klarna lowered its operating expenses by 16% last year after reducing its workforce count from 5,441 to 4,201 employees.
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| 2 | | Vertical farming startup Oishii defied the VC funding dip with a $134M Series B funding round led by Japanese telecom giant NTT. What happened: Oishii grows organic strawberries and tomatoes using Japanese farming methods. Its products can be found at multiple Whole Foods Market locations. The Series B round was significantly larger than Oishii's $50M Series A round from 2019. Oishii will use the proceeds to expand its geographical presence. 
What the numbers say: Oishii is an outlier in the vertical farming sector to raise funding, as investors have slowed their investments since 2022 due to scaling challenges, heightened commercial retail prices, and capital-intensive facilities. VC funding invested in the sector dropped by over 90% from $2.46B in 2022 to just $294M in 2023, per Pitchbook. Relevance: The sector has seen some high-profile bankruptcies in 2023, including Infarm and AeroFarms. Other notable startups in the sector, including Bowery Farms and Plenty, have made layoffs in the last year. | | | |
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| 3 | | The U.S. Securities and Exchange Commission (SEC) is reviewing whether OpenAI misled investors during CEO Sam Altman's ousting and subsequent reinstatement in November 2023. The regulator issued a subpoena to OpenAI in December and has instructed former and current executives to preserve internal documents related to the matter. More: - The board fired Altman in November after concluding "that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities."
- However, Altman was reinstated to his position two weeks later following a board restructuring.
- Sources close to the matter suggest that this is a standard course of action taken by the SEC, and the regulator has not found any statement or communication that could be deemed misleading.
Zoom out: - In addition to the SEC probe, Altman is the subject of an internal investigation looking into the abrupt nature of his ousting.
- Altman's ousting could be linked to his fundraising initiatives for a new chip venture and a dispute with former board member Helen Toner, per Bloomberg.
- Government authorities in the U.S. and Europe are also examining OpenAI's relationship with Microsoft, which invested about $13B for a 49% stake in the AI firm last year.
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| 4 | | Early Alameda Research employee Armani Ferrante and former FTX general counsel Can Sun co-founded a new crypto exchange, wallet, and NFT collection startup called Backpack. The Dubai-based company raised $17M in Series A funding at a valuation of $120M. More: - Ferrante is the CEO of Backpack, which launched the exchange in October 2023.
- The exchange already has 420,000 verified global users and facilitated $6.54B worth of one-side transactions in February.
- The company has 40 employees, five of which are former FTX employees.
- Placeholder VC led the round, joined by Wintermute, Robot Ventures, Selini Capital, and Amber Group.
Zoom out: - Sun testified in FTX's founder Sam Bankman-Fried's criminal trial last October, saying that he was unaware that the company was misusing customers' funds until its final days.
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| 5 | | AI chip startup SambaNova launched a new generative AI product for enterprise customers. The Samba-1 platform can help enterprises with text rewriting, coding, language translation, and other tasks. More: - Co-founder and CEO Rodrigo Liang said, "Samba-1 is fully modular, enabling companies to asynchronously add new models … without eliminating their previous investment."
- Liang believes that Samba-1 is better than other alternatives available as it has multiple models that are trained independently, giving customers control over prompts and how the requests are routed.
- As SambaNova offers a full-stack solution, including AI chips, customers have complete privacy over their data as it is stored locally on a single server rack rather than on public cloud platforms.
- The startup has raised over $1.1B to date from SoftBank Vision Fund, BlackRock, Intel Capital, and other VC investors.
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| 6 | | Payment firm Afterpay's vice president of marketing, Natalie McGrath, joined fashion rental startup Rent the Runway as its chief marketing officer. McGrath has been tasked with growing the startup's customer base. She plans to create a marketing team to quickly pick up cultural trends and keep up with fluctuating behaviors. Additionally, McGrath plans to increase the startup's presence through live events, experiences, public relations, influencer marketing, and ambassador programs. More: - Co-founder and CEO Jennifer Hyman said the company has some cash available for marketing in 2024 after lowering costs by reducing 10% of its corporate roles last month.
- Hyman added, "This is really about refocusing on growth, which we certainly have not been doing over the last few years."
- Rent the Runway, which offers designer outfits on rent through a monthly subscription plan, had to halt its growth plans at the onset of the pandemic.
- About 50% of its customer base canceled or paused its membership within days of the arrival of the COVID-19 pandemic in 2020.
Zoom out: - The global apparel rental market doubled to $6.2B between 2016 and 2023, per GlobalData.
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| 7 | | Quick Hits: - Business Owners who took Visa or Mastercard from Jan. 1, 2004, to Jan. 25, 2019, apply to see if you are entitled to a portion of a $5.6B payout.*
- Aaron Rodericks, the former Trust and Safety team leader at X (formerly Twitter), joined the decentralized social network platform Bluesky as its new head of Trust and Safety.
- Range Energy, a startup manufacturing electric trailers to decarbonize freight transport, bagged $23.5M in fresh funding led by Trousdale Ventures. UP.Partners, R7 Partners, and Yamaha Motors Ventures participated in the round.
- 3D laser engraver maker Glowforge has filed a legal suit against tech enthusiast and self-professed activist Jonathan Gleich for making false and defamatory statements about the company and its products. Gleich has been claiming for years that Glowforge is selling defective and dangerous products.
- German climate tech startup atmio emerged from stealth with methane leakage monitoring solutions for natural gas operators. The firm has raised €1.3M ($1.4M) in pre-seed funding from Robin Capital, HCVC, and Nucleus Capital.
- European cyber tech startup Filigran raised €15M ($16.3M) in Series A funding. Accel led the round, with additional support from existing backers Moonfire Ventures and Motier Ventures.
- Uncover the trends shaping the business landscape in 2024. From building trust to leveraging tech, our report shares crucial developments for success.*
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 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Aaron Crutchfield | |
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