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| Here's your daily Startups briefing: - 🔀 Inflection shifted to an enterprise business model as two co-founders moved to Microsoft
- 💰 U.S. crypto startups offered 13% higher salaries than foreign peers, per a survey done by Dragonfly Capital
- 💻 Nala developed its proprietary B2B payment platform to reduce incidences and lower charges
Thank you. Karan
p/karan-chafekar | |
| 1 | | AI startup Inflection AI has shifted to an enterprise business model after Microsoft hired two of its co-founders and most of its employees to join its AI division. Co-founder and CEO Mustafa Suleyman will be heading Microsoft's newly formed consumer AI division, dubbed Microsoft AI. Inflection has retained its proprietary technology and plans to license it to Microsoft. More: - Co-founder and chief scientist Karén Simonyan will join Suleyman at Microsoft.
- The third co-founder, Reid Hoffman, is staying back as the startup charts a new strategic course.
- Mozilla's former chief research and development officer, Sean White, succeeded Suleyman as Inflection's new CEO.
- Hoffman assured that all of Inflection's investors "will have a good outcome today, and I anticipate good future upside."
- The firm has raised $1.5B to date from Microsoft, Nvidia, Bill Gates, and Hoffman.
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| 2 | | U.S.-based crypto startups offered 13% higher salaries than their foreign peers, per a survey conducted by Dragonfly Capital that involved 49 of its portfolio companies. 
What the numbers say: Pay packages were 30% higher when considering equity and token incentive packages. Founders earned $300,000 or more when their startup reached the Series C stage funding round. Engineers at the executive level earned as much as $283,000 a year, excluding equity and token incentives. Relevance: While most U.S.-based startups offered salaries in fiat currencies, international firms were more likely to offer crypto token compensation options to employees. What happened: The survey found that only 11% of U.S. crypto startups launched their own tokens, much lower than 38% of the international firms. The lower token issuance rate in the U.S. can be attributed to the SEC's aggressive stance towards digital assets. | | | |
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| 3 | | Cross-border payments processing fintech Nala developed its proprietary B2B payment platform called Rafiki. The new solution aims to reduce payout incidences, lower user charges, and increase transaction reliability. More: - Nala offers international payment remittance services in 11 African markets and has integrated its solutions with 249 banks and 26 mobile money services in the region.
- The firm started offering remittance services in 2021 but had to build its offerings on platforms provided by other fintechs.
- "We built the Rafiki infrastructure not by choice but by the nature of the market. When we started, we were experiencing 15% failure rates from partners as we started to scale, and this affected our cost of operations massively," said founder Benjamin Fernandes.
- The new solution will help it scale in new markets.
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| 4 | | Databricks acquired Lilac AI, a startup that helps developers manage datasets used for AI projects. Financial details of the acquisition were not disclosed. Databricks plans to integrate Lilac AI's solutions into its flagship data management and AI platform. More: - Daniel Smilkov and Nikhil Thorat, the former Google engineers behind TensorFlow.js, co-founded Lilac AI along with Matei Zaharia.
- The Boston-based startup has developed an open-source tool, dubbed Lilac, that streamlines the task of analyzing unstructured text datasets.
- The tool groups similar documents and generates a description of each group that can help developers understand the dataset.
- Databricks expects Lilac AI's solutions to complement the AI development technology it obtained when it acquired MosaicML for $1.3B last June.
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| 5 | | Engrail Therapeutics raised $157M in Series B funding to further advance its neuropsychiatric treatment through clinical development stages, starting with the phase 2 trial of its ENX-102 candidate for patients with generalized anxiety. The fresh funding extends Engrail's cash runway until the middle of 2026. More: - The topline data from the trial testing of ENX-102 is expected to arrive in the first half of 2025.
- F-Prime Capital, Forbion, and Norwest Venture Partners co-led the latest funding round, bringing the total capital the firm raised to date to over $220M.
- Investors participating in the round include RiverVest Venture Partners, Red Tree Venture Capital, Ysios Capital, Longwood Fund, Eight Roads Ventures, and Pivotal Life Sciences.
- Engrail emerged from stealth in 2020 with a $32M Series A funding round, which was later extended to $64M in 2021.
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| 6 | | Singaporean startup ShopBack laid off 195 employees, or 24% of its workforce. The move aims to make the company more focused and self-sustainable, per CEO Henry Chan. Earlier this month, the online shopping rewards startup announced it is shutting down its buy-now-pay-later program. More: - Chan said, "I made the mistake of pursuing too many directions as a company and expanding our team too rapidly."
- ShopBack added buy-now-pay-later services to its platform after it acquired fintech startup Hoolah in 2021.
- The company has faced difficulties achieving sustainable growth despite freezing salary hikes for leaders and paying lower bonuses since 2022.
- ShopBack has raised about $335M from investors until now, including a $200M Series F funding round from Westpac Banking Corp. and Asia Partners in 2022.
Zoom out: - Companies offering buy-now-pay-later services in the region have struggled due to reduced household spending due to rising inflation and additional oversight from government regulators.
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| 7 | | Quick Hits: - Sign up for real-time, easy-to-understand business credit alerts and get the insights you need to help you reach your business goals.*
- The U.S. Department of Defense abruptly shut down the $2M Shift fellowship program due to funding constraints. The program aimed to strengthen the Pentagon's relationship with startups and venture capitalists.
- Cure51, a healthtech startup trying to predict outcomes in cancer treatment, bagged €15M ($16.3M) in seed funding. Sofinnova Partners led the round, with additional support from Hitachi Ventures, Life Extension Ventures, and other investors.
- AI and analytics company Further acquired Pandata, a startup that designs and develops AI systems for high-risk industries, such as defense and energy. Financial details of the transaction were not disclosed.
- Visa and Mastercard have reached a groundbreaking $5B settlement, reshaping the landscape of financial transactions as we know it.*
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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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