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| Here’s your daily Startups briefing: - 🤝 Automattic acquired Beeper for $125M to bolster messaging capabilities
- 💰 Factorial secured a €80M debt facility from General Catalyst
- 👥 Background screening startup Checkr laid off 382 employees, or 32% of the workforce
Thank you. Karan
p/karan-chafekar | |
| 1 | | Automattic, the company behind Wordpress.com, is set to acquire cross-platform messaging app Beeper. Sources pegged the deal value to be about $125M. Founder Eric Migicovsky was searching for a buyer or planning to raise additional funding after realizing the high costs associated with running Beeper. More: - Last October, Automattic acquired another cross-platform messaging app, Texts.com.
- Migicovsky is set to join Automattic as its new head of Messaging, a role previously held by Texts.com's founder Kishan Bagaria.
- Beeper's 25 employees are set to join Automattic's workforce, along with Texts.com's 15-member team.
- The startup had raised about $16M from investors, the last of which came in through a $8M Series A round led by Initialized.
- Notable backers of the firm include YC, Samsung Next, and Liquid2 Ventures.
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| 2 | | HR platform Factorial secured a €80M ($85.9M) debt facility from U.S. VC firm General Catalyst. 
Relevance: The facility can only be used for new customer acquisition as it is a "contained" form of debt. The firm will need to repay the debt from revenue earned from the new customers. Founder and CEO Jordi Romero said, "We pay a little bit more interest than with your typical venture debt. But on the other hand, we don't mortgage anything." Factorial claims it still has about €100M ($107.4M) left from its previous €120M ($128.9M) Series C round from 2022. However, those funds have been set aside for strategic opportunities, including backing acquisitions and developing new products. What the numbers say: Factorial avoided raising an equity round, instead preferring to pay "a small financial cost without dilution," per Romero. An increasing number of startups are opting for debt financing to avoid valuation markdowns amidst the economic downturn. However, startups are struggling to raise debt funding since the failure of the most notable startup debt financier, Silicon Valley Bank. Debt funding slumped from 2022's record-high of $42.5B to $30.9B in 2023, per Pitchbook. | | | |
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| 3 | | Employee background screening solutions startup Checkr laid off 382 employees, lowering its workforce strength by 32%. Checkr claims the layoffs have been made in response to the prevailing economic conditions and to ensure the company's long-term sustainability. More: - Checkr touched a valuation of $5B in April 2022 and has raised about $679M in total funding to date from investors.
- It last raised a $250M funding round in Sept. 2021.
- Notable investors that have previously backed the company include Durable Capital Partners, Fidelity Management & Research, Franklin Templeton, BOND, and Coatue Management.
- The firm has offered the affected employees a minimum of 10 weeks of severance and health insurance.
Zoom out: - Two years ago, Checkr acquired background-checking startup Inflection in a deal reportedly valued at $400M.
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| 4 | | Alt Capital, a VC firm launched by OpenAI CEO Sam Altman's brother Jack, launched an accelerator program called Generate to back startups developing enterprise AI solutions. Startups joining the VC firm are set to receive $250,000 in equity funding. Additionally, startups will receive credits worth $350,000 from Microsoft to use its Azure cloud-computing service to train and run large AI models. More: - Alt Capital expects to select about 10 to 15 mature startups, which have raised about $10M through seed or Series A rounds, for the accelerator program.
- The two-month-long program aims to start its first cohort in late May.
- Sam Altman is one of the speakers and advisors for the program, along with Elad Gil and Figma CEO Dylan Field.
Zoom out: - Alt Capital is just one of the nine firms that can provide its portfolio startups GPU access to Microsoft's cloud-computing service.
- Other firms accessing Microsoft's services include Y Combinator, AI Grant, and Conviction.
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| 5 | | Israeli nanotech startup Gauzy is aiming for a valuation range of $400M to $500M at its upcoming IPO debut on the Nasdaq stock exchange. The firm plans to file a prospectus with the U.S. SEC in the next few days to go public as early as this quarter. More: - Gauzy plans to raise $100M from its public debut, $50M less than its $150M target from 2022 when it initially filed a confidential prospectus with the SEC but shelved plans when the market conditions soured.
- The startup has also scaled back its valuation compared to its $600M target at the previous filing.
- The firm is going ahead with its IPO offering despite prevailing economic conditions as it believes it could boost its sales.
- Gauzy, which specializes in smart glass with adjustable shading, counts BMW, Hyundai, Mercedes, Texas Instruments, and Airbus as its most prominent clients.
- To date, the firm has raised about $125M from investors and touched an annual revenue of $100M.
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| 6 | | Privacy and security company Proton acquired encrypted notes app Standard Notes for an undisclosed sum. The acquisition should deepen Proton's reach within the community of pro-privacy users. In addition, the firm may leverage the acquisition to drive more cross-selling opportunities. More: - Standard Notes will continue to operate as an independent business after the acquisition.
- About 300,000 users use Standard Notes open-source note-taking app, which is available on both mobile and desktop platforms.
- However, in the long run, Proton might integrate Standard Notes' offering into its own products.
- Both have avoided venture capital to drive growth till now and remain committed to keeping their technology open source.
Zoom out: - The transaction marks Proton's second acquisition to date after buying French email alias startup SimpleLogin in 2022.
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- Cybersecurity decacorn Wiz completed the acquisition of cloud detection and response solution provider Gem Security announced last month. The deal was estimated to be worth $350M.
- Personalized workouts app Volt Athletics acquired mental health service startup ZAMA Health for an undisclosed sum. The acquisition will help Volt provide mental health and wellness features through its app.
- Retail tech startup Fabric announced its second round of layoffs, letting go of about 30 employees, or 15% of its workforce this week. Fabric previously laid off 150 employees in July 2022.
- Deep Track Capital led a $158M Series B-2 funding round into clinical-stage biotech startup TORL BioTherapeutics. Investors participating in the round include RA Capital Management, Perceptive Advisors, Avidity Partners, Goldman Sachs Alternatives, Bristol Myers Squibb, Vertex Ventures HC, Blue Owl Healthcare Opportunities, and other investors.
- Latin American real estate startup Habi bagged a $30M debt facility from World Bank's International Finance Corp. and Victory Park Capital Advisors. Habi will use the fresh capital to expand further into Mexico and Colombia.
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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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 | Lacework is a data-driven security platform for the cloud and the leading cloud-native application protection platform solution. | |
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