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| Here's a look at today's Startups briefing. - 🤝 Cox Enterprises is set to acquire OpenGov for $1.8B
- 🚫 Demand for startup winding-down solutions is increasing
- 📝 Microsoft inks agreement to buy 10,000 credits from Bio-Logical Carbon
Thank you. Karan
p/karan-chafekar | |
| 1 | | Communications and automotive giant Cox Enterprises is set to acquire government software startup OpenGov for $1.8B. OpenGov's co-founder and CEO, Zac Bookman, will continue to run the company in the same role, while the company will be run under the Cox brand. The fresh capital will help OpenGov pursue additional strategic acquisitions and make longer-term decisions. More: - The San Francisco-based startup provides budgeting, accounting, asset management, procurement, permitting, and other software solutions to about 1,900 government entities across the U.S.
- OpenGov acquired Cartegraph, a cloud software developer for public agency operations, in 2022.
- Cox already held a minority stake in OpenGov after participating in its $51M Series D round in 2019 and a $51M Series D extension round in 2021.
- The firm had about $200M in total equity funding from investors, the most notable of which were Andreessen Horowitz, Founders Fund, Emerson Collective, Draper Associates, 8VC, Thrive Capital, and ACME Capital.
- It was last valued at $750M when it raised the Series D extension round in 2021.
- In Q4 2023, OpenGov reported a 76% YoY growth in gross new sales.
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| 2 | | As startup failure rates increase, organizations specializing in assisting startups with winding down operations are experiencing significant growth, per Pitchbook. 
What happened: The median time startups took to raise subsequent funding rounds widened from 1.27 years in 2022 to 1.51 years in 2023. About 55% of U.S. startups that last raised a funding round in 2020 and 2021 are yet to secure new funding, get acquired, or go public. What the numbers say: The unfortunate reality is that many startups fail, a number that has only increased in a tough environment such as now. Startups such as SimpleClosure and Sunset emerged recently to assist startups in winding down operations. SimpleClosure closed a $4M seed round led by Infinity Ventures today. The firm reported a 14x increase in revenue and a 6x jump in its customer base since its official launch last September. The startup has already crossed $1M in annualized revenue. Between November 2023 and January 2024, Sunset saw a 9% QoQ revenue growth and a 65% monthly customer growth rate. Equity management platform Carta also launched a new startup shutdown service called Carta Conclusions earlier this month. Relevance: If a startup is on the verge of shutting down, investors want it to shut down before it runs out of cash entirely, as that would bring about potential liabilities. Sunset's founder and CEO, Brendan Mahony, suggests typical enterprise software startups maintain a reserve of $30,000 to $50,000 to cover winding-down expenses and potential liabilities. | | | |
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| 3 | | Media startup DailyHunt wants to acquire social network startup Koo, sources informed TechCrunch. Discussions are in the advanced stages and could be finalized within the next few weeks. The transaction will likely involve a share-swap agreement. More: - News of Koo's acquisition comes after it aggressively hunted for fresh funding all throughout last year.
- To date, Koo has raised $60M from Tiger Global, Accel, 3One4 Capital, Mirae Asset, Blume, and other investors.
- Co-founder Mayank Bidawatka was looking for a strategic partner last September to help the company unlock its next phase of growth.
- Dailyhunt's parent group, VerSe Innovation, has a reach of more than 300M users in India.
- The parent group last raised a $805M funding round in April 2022 from the Canada Pension Plan Investment Board, Ontario Teachers' Pension Plan Board, Sofina Group, and Baillie Gifford.
- Dailyhunt was last valued at $5B.
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| 4 | | Tech giant Microsoft has inked an agreement to purchase 10,000 carbon removal credits through 2025 from biochar project startup Bio-Logical Carbon. The Kenyan startup will deliver the credits via puro.earth's Accelerate platform. Each credit represents one metric ton of carbon dioxide captured from the atmosphere. More: - Bio-Logical Carbon traps carbon in agricultural waste by burning it in a low-oxygen environment.
- The resulting biochar is mixed with fertilizers to create carbon-rich fertilizer and distributed back to local farmers, who use it to regenerate degraded soil.
- The startup plans to scale its facility to process more than 30,000 metric tons of agricultural waste yearly.
Zoom out: - Microsoft has also signed deals with soil carbon developer Grassroots Carbon, agroforestry developer Catona, and carbon capture startup Neustark in a bid to become carbon-negative by 2030.
- The firm produced 1.5 million carbon removal credits in fiscal year 2022, of which 1.3 million units came from forestry projects and the remaining 200,000 from sustainable agriculture initiatives.
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| 5 | | Underground mapping software maker Exodigo raised $105M in Series A funding, which includes $75M in fresh funding and $30M from SAFEs from the seed round that were converted into equity. Exodigo will use the proceeds to accelerate the development of a self-service product line, expand into new markets, and grow its workforce. More: - Exodigo uses sensors, 3D imaging, cloud computing, and a proprietary AI platform to map the underground topography and identify assets and hazards.
- The firm collects about 500 GB of data per scanned acre and claims to reduce unnecessary preliminary digging by 90%.
- Notable customers include Aecom, Colas Rail, Houston Metro, Israel Electric Corporation, LA Metro, National Grid, and VINCI.
- Greenfield and existing investor Zeev Ventures co-led the round, with additional backing from SquarePeg, 10D VC, JIBE, and National Grid Partners.
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| 6 | | Subsets has developed an AI platform that helps companies in the subscription industry reduce their churn rates by recommending experiments that would help retain customers. Within six months of its launch, the firm has already roped in New York Times-owned The Athletic and Danish newspaper Børsen as clients. The Danish startup raised $1.65M in pre-seed funding led by Upfin and Y Combinator. More: - The startup is currently catering to the digital media vertical within the subscription industry, including digital publishers, streaming services, subscription apps, and telecoms, per co-founder and CEO Martin Johnsen.
- Johnsen expects the company to eventually start serving clients within the mobility, banking, and food delivery space.
- Subsets platform connects with CRM, CMS, billing, data warehouse, and other internal systems to gather data points about subscribers, including demographics, content preferences, and viewership time.
- Using the data, it recommends certain experiments that might convince subscribers to stay.
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| 7 | | Quick Hits: - Discover the trends shaping 2024 and learn how trust will be the key to business success. Shape your strategy and get ahead with this latest report.*
- Lightspeed led a $64M Series B funding round into Intenseye, an AI startup that prevents workplace accidents. Existing backers Insight Partners, Point Nine, and Air Street Capital participated in the round.
- French photo-editing generative AI startup Photoroom raised a Series B round worth $43M led by Balderton Capital and Aglaé Ventures. Y Combinator backed the round, which valued the firm at around $500M.
- Equatic, a Boeing-backed cleantech startup, is constructing a demonstration plant in Singapore. The startup aims to use seawater and electrolyzers to remove carbon from the atmosphere and use it to produce hydrogen. Once completed, the plant will be able to capture 3,650 metric tons of carbon dioxide and produce 100 tons of hydrogen every year.
- Visa and Mastercard have come to a historic $5B settlement, marking a pivotal moment for small business owners. If your business accepts Visa/MC, claim your share today.*
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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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