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| Here’s your daily Startups briefing: - ❌ Qualcomm canceled the acquisition of Autotalks due to regulatory hurdles
- 🦄 E-commerce firm Uzum became Uzbekistan’s first unicorn startup
- 👤 Emad Mostaque stepped down as Stability AI’s CEO
Thank you. Karan
p/karan-chafekar | |
| 1 | | Chip maker Qualcomm has terminated its agreement to acquire Israeli collision avoidance chip startup Autotalks "due to lack of regulatory approvals in a timely manner," the company said in a statement. Qualcomm announced the acquisition in May 2023. While the firm did not initially reveal the transaction price, sources estimated the deal value to be worth about $350M. More: - Autotalks was developing semiconductors for vehicle-to-vehicle communications designed to reduce collisions and improve mobility.
- The firm recently announced its third generation chipset, "which is the only chip supporting 5G-V2X communication, even concurrently with the legacy DSRC communication," per Autotalks.
- While Qualcomm is reassessing its strategy in light of the decision, the company reiterated the importance of the automotive vertical and remains fully committed to its product roadmap, customers, and partners.
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| 2 | | Online shopping, buy-now-pay-later service, and food delivery e-commerce startup Uzum became Uzbekistan's first unicorn after achieving a $1.16B valuation while raising $114M in Series A funding. 
What happened: $52M of the Series A funding came in the form of equity financing, with the remaining $62M in debt. FinSight Ventures led the round with additional support from Xanara Investment Management. The startup will use the proceeds to expand its product portfolio, enhance e-commerce infrastructure, and grow the fintech business. The firm has diluted less than 5% of its total shares. Uzum plans to raise a $200M Series B round later this year. Relevance: Uzum launched its marketplace in October 2022 and has about 8M monthly active users. The firm expects to touch a gross merchandise value of $300M this year, doubling the $150M GMV achieved in the first full year of operations. What the numbers say: Uzum is the latest entrant to the unicorn club, joining an elite list that includes about 1,229 other global startups, per CB Insights. The unicorn creation rate slowed down last year, with just 71 new entrants in 2023. However, the unicorn minting rate increased from 14 in Q3 2023 to 23 in the subsequent quarter. More than half (53%) of unicorns are based in the U.S. | | | |
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| 3 | | Co-founder Emad Mostaque has stepped down from the CEO role at Stability AI. COO Shan Shan Wong and CTO Christian Laforte will succeed Mostaque on an interim basis as co-CEOs until a permanent successor is appointed. Five days ago, key members of its research team, including Robin Rombach, Andreas Blattmann, and Dominik Lorenz, departed the company. More: - The British AI startup gained widespread recognition with the launch of its text-to-image generation tool, Stable Diffusion.
- The company has faced challenges in converting the tool's popularity into financial success.
- The company started spiraling last year, with Mostaque expressing dissatisfaction with the company's recent direction.
- Stability reportedly held acquisition talks with a few potential buyers, as it is struggling to pay staff wages and payroll taxes.
- Reportedly, Amazon Web Services has threatened to shut down the company's servers over unpaid cloud bills.
- Regarding the decision to step down, Mostaque said, "The concentration of power in AI is bad for us all. I decided to step down to fix this at Stability & elsewhere."
- Stability cemented its unicorn status after crossing the $1B valuation mark in 2022.
Zoom out: - Per SiliconAngle, Mostaque's resignation could be due to pressure from investors or the company's board to seek out an acquisition by a larger company.
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| 4 | | Bankrupt crypto exchange startup FTX is set to liquidate two-thirds of its AI startup Anthropic shares for about $884M. Per the court filing, FTX has lined up about 24 buyers, including UAE sovereign fund Mubadala's affiliate ATIC Third International Investment, Jane Street Global Trading, HOF Capital, and funds managed by Fidelity Management and Research. In 2021, FTX invested $500M in Anthropic and currently holds 7.8% shares of the company. More: - ATIC Third International Investment is set to pick up a stake worth nearly $500M.
- The proceeds from FTX's divestiture will be used to repay creditors.
- FTX, which filed for bankruptcy in Nov. 2022, expects to repay creditors in full and had already amassed $6.4B in cash by late February.
Zoom out: - Anthropic has capitalized on the AI funding boom, getting commitments worth $4B from Amazon and $2B from Google last year.
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| 5 | | Graphic design software maker Canva Inc. acquired the entire 90-person team behind Affinity, a creative software startup specializing in photo-editing, publishing, and illustration tools. The acquisition will help Canva expand its AI-powered tools. More: - While the exact financial details of the transaction were not disclosed, the deal was worth "several hundred million pounds" in a mix of cash and stock, per Canva's co-founder and COO Cliff Obrecht.
- Canva recently completed a $1.5B secondary share sale, giving the firm an implied valuation of $26B.
- The Australian startup touched $2.1B in annualized revenue and 175M users.
- Since introducing the AI tools 18 months ago, the company has added 90M new users.
Zoom out: - Canva has acquired seven startups to date, including Kaleido.ai, Pexels, and Pixabay.
- However, the Affinity acquisition is its largest yet.
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| 6 | | Online tutoring marketplace GoStudent has reportedly turned profitable, co-founder and CEO Felix Ohswald told TechCrunch. The company has not only achieved positive EBITDA but also positive operating cashflow across the entire GoStudent Group. GoStudent paused acquisitions and expansion efforts in markets where online tutoring was not established or price competition was intense. It exited the U.S. market to focus on the core 20 nations in Europe. More: - The Austrian startup caters to about 11M families through 23,000 tutors available on its platform.
- The turnaround comes after two years of struggles, characterized by high cash burn, layoffs, and cost-cutting measures in response to a sharp drop in customer demand.
- GoStudent reported €89M ($96.5M) losses in 2021 and €220M ($238.6M) in 2022.
- The startup had a cash burn of over €150M ($162.7M) in 2022 alone, which it reduced by 70% in 2023.
- The firm announced three rounds of layoffs since 2022.
- In 2024, the firm wants to stay cashflow positive, prioritize its mission of prioritizing student needs, and leverage AI to scale its operations efficiently.
- Last August, the firm secured $95M in equity and debt financing.
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| 7 | | Quick Hits: - Pattern released a 30-page insights report for beauty brands selling on Amazon.*
- Bolt's global head of sales Justin Grooms succeeded Maju Kuruvilla as the CEO of the one-click checkout startup.
- Ingersoll Rand agreed to acquire life sciences company ILC Dover from New Mountain Capital LLC for an upfront cash amount of $2.325B.
- EV vehicle startup Canoo acquired some of the assets of bankrupt commercial EV startup Arrival. Financial details of the transaction were not disclosed. The acquisition will help Canoo reduce capital expenditures by 20%.
- AI chip startup Eliyan Corp. secured $60M in Series B funding co-led by Samsung Catalyst Fund and Tiger Global. Other investors participating in the round include Intel Capital and SK Hynix.
- Ready to get your AWS cloud spend under control? Learn how to effectively audit and reduce AWS costs today.*
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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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