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| Here’s your daily Startups briefing: - 💰 Amazon invested $2.75B in Anthropic, fulfilling its $4B commitment
- 🛰️ Space startup funding surged by 31% QoQ in Q4 2023
- 🔎 U.S. Senator urged the CMS to look into alleged abuse complaints at Papa Inc
Thank you. Karan
p/karan-chafekar | |
| 1 | | E-commerce giant Amazon announced it has invested $2.75B in AI startup Anthropic, fulfilling its $4B commitment made last year. Amazon invested $1.25B in the company last September, acquiring a minority stake in the generative AI software maker. Per sources, the AI startup was valued at $18.4B in the recent deal. More: - The fresh funding comes just one month after Anthropic debuted the latest generation of its generative AI platform, Claude 3.
- Amazon claims Anthropic's Claude 3 Opus AI model outperformed OpenAI's GPT-4 in reasoning, math, and coding benchmark tests.
- Swami Sivasubramaniam, AWS's VP of data and AI, believes "our strategic collaboration with Anthropic will further improve our customers' experiences, and look forward to what's next."
Zoom out: - Google invested $2B in Anthropic last year, shortly after Amazon announced its $4B commitment.
- Last year, generative AI startups raised $29.1B in VC funding from investors across nearly 700 deals, per Pitchbook.
- Microsoft's $13B investment in OpenAI sparked the AI funding frenzy at the start of 2023.
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| 2 | | Global space startups raised $4.6B in VC funding in Q4 2023, per data from Space Capital reviewed by TechCrunch. 
What the numbers say: Funding for space startups surged by 31% compared to the previous quarter. The uptick in the last quarter helped bring the total for the entire year to $17.9B. While the investments in Q2, Q3, and Q4 were consistent with the previous year, the significant plunge in the year's first quarter resulted in the total annual tally hitting a decade-low in 2023. Since 2014, investors have allocated $298B to 1,832 space startups. Where to see the impact: British investment firm Seraphim Space predicts a "healthy year" for investment in the space sector if Q4's upward trajectory continues this year. Last week, Italian space logistics startup D-Orbit bagged €100M ($109.37M) in fresh late-stage funding led by Japan's Marubeni. Relevance: Legacy space companies took advantage of the VC funding dip last year by doubling the number of acquisitions, which could help them retain their competitive market advantage and bolster their in-house capabilities. | | | |
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| 3 | | Senator Bob Casey (D-Pa.) addressed a letter to the Centers for Medicare and Medicaid Services (CMS) urging them to look into the abuse customer complaints at Papa Inc., a healthcare startup that connects older adults with caregivers. Sen. Casey pushed CMS to seek information about the proactive measures implemented by Papa Inc. to address the allegations. More: - The elder care startup has come under intense scrutiny after a Businessweek investigation uncovered 1,200 confidential complaints last May, accusing Papa's caregivers of abuse, sexual assault, harassment, theft, and inadequate care over the past four years.
- After the investigation was published, several major health insurers declined to renew their partnership with the company, including Cigna, Humana, Aetna, and Molina.
- Papa Inc. announced a series of trust and safety measures after being questioned about its safety practices and complaints in July.
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| 4 | | Standard AI's CEO Jordan Fisher and co-founders Brandon Ogle and Daniel Fischetti left the AI startup to join the food delivery platform DoorDash. In addition, the firm also pivoted from making autonomous checkout products to computer vision-powered analytics solutions for retailers. More: - The San Francisco, Calif.-based startup promoted COO Angie Westbrook to the CEO role, while technology strategy senior vice president David Woollard will assume the CTO role.
- Since its founding in 2017, Standard AI has raised more than $260M from investors, including SoftBank Vision Fund and EQT Ventures.
- The startup cemented its unicorn status in 2021 after crossing the $1B valuation mark.
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| 5 | | Healthtech startup Sagility acquired BirchAI, a startup building software to streamline customer support for healthcare companies. The acquisition will help Sagility expand its analytics and automation-backed healthcare engagement services. More: - Financial details of the transaction were not disclosed.
- CEO Kevin Terrell, CTO Yinhan Liu, and COO Sumant Kawale launched BirchAI in June 2020.
- After emerging from the A12 Incubator in 2021, BirchAI bagged a $3.1M seed funding round in Jan. 2022.
- Notable investors that previously backed the startup include Radical Ventures, Flare Capital Partners, Washington Research Foundation, and AI Grant.
- Terrell said the acquisition will "allow us to accelerate the build-out of our healthcare-specific generative AI solutions for contact centers."
- In addition to healthcare, BirchAI also caters to the insurance, banking, and other markets.
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| 6 | | Synctera, a banking-as-a-service startup that brings together fintech companies and sponsor banks, laid off 15% of its workforce, or about 17 people, per a Fintech Business Weekly report seen by TechCrunch. The company had 113 employees before the layoffs. The layoffs come amidst a challenging time for BaaS startups, marked by increasing regulatory crackdowns in 2023. More: - Earlier this month, the startup extended its $15M Series A round from 2021 with an additional $18.6M capital led by existing investors Lightspeed and Fin Capital.
- At the same time, Synctera hired Leigh Gross as its new chief revenue officer.
- National Bank of Canada's VC arm NAventures, Banco Popular, and Mana Ventures are some notable investors that have backed the startup.
Zoom out: - Per an S&P Global Market Intelligence report, 13% of the severe enforcement actions taken by federal bank regulators were aimed at BaaS fintech startups.
- Other BaaS startups that have recently conducted layoffs include Treasury Prime, Synapse, and Figure Technologies.
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- AI-powered news app Artifact has continued to function past its shut-off date at the end of Feb. 2024. Earlier this year, the startup, founded by Instagram's co-founders Kevin Systrom and Mike Krieger, announced its impending closure after realizing the market opportunity wasn't "big enough to warrant continued investment." Systrom said, "It will still likely go away, but we're exploring all possible routes for it going forward."
- Sunshine, a startup founded by former Yahoo CEO Marissa Mayer, introduced event organizing and photo-sharing features for its contact management platform.
- About 70% of unicorn startups in the U.S. and the U.K. were founded by immigrants, women, and people of color, per the Unicorn Founder DNA report published by Defiance Capital.
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 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Karan Chafekar | |
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