Corteva sues Inari Agriculture / 31 liquidity programs took place in H1 / Nord Security raises $100M

Plus, VR training startup Transfr raises $40M

Inside Startups For September 28, 2023

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Hey Insiders, Here are the latest stories: Corteva sues Inari Agriculture 31 company-sponsored secondary transaction programs occurred in H1 Nord Security raises $100M at a $3B valuation  If you find this newsletter useful, please share it with your friends and colleagues. Thank you. Karan p/karan-chafekar

1 Seed and crop protection giant Corteva Agriscience Inc. filed a lawsuit against seed-gene-editing startup Inari Agriculture in federal court in Delaware. Corteva alleges that Inari illicitly obtained its patent-protected seeds from a U.S. depository and was looking to patent the seeds in the U.S. after making minor changes to the plants' genetics.  More: Corteva, which spun out of DowDuPont in 2019, claims that Inari used a seed-distributor company to purchase its proprietary seeds from the American Type Culture Collection and shipped them from the U.S. to Belgium.  According to the suit, Inari has not sold any gene-edited products derived from Corteva's seeds but was planning to commercialize them.  Zoom out: Massachusetts-based Inari partners with seed makers to use its gene-editing technology to enhance their products.  The firm, valued at $1.5B last year, is focused on developing new varieties of corn, soybeans, and wheat to make them more resilient to climate change.  Q: What strategies can companies use to safeguard their proprietary technologies and prevent competitors from infringing upon them? Join the conversation here.

2 31 company-sponsored secondary transactions took place on the Carta platform in H1 2023, almost matching H2 2022's tally of 32.  What the numbers say: Liquidity transactions worth $377M were completed on the Carta platform in H1 2023. The deal value was the lowest so far this decade, suggesting that buyers are still waiting for the buy-ask spread to reduce.  Relevance: The average size of the secondary transactions in H1 2023 was $12.2M. The figure is less than half of H1 2022's value of $25.3M and nearly a third of H1 2020's figure of $35.5M. The value of liquidity programs increased by 69% from Q1 to Q2. 37% of the startups organizing the secondary transactions were valued at less than $250M, while 43% were valued at $1B or more, and 10% were worth $2.5B or more.

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3 Nord Security, a VPN provider, announced it raised a $100M round led by private equity group Warburg Pincus. This brings the company's valuation to $3B.  More: Nord last raised $100M at a $1.6B valuation in Apr. 2022. The round was led by Novator Ventures, with participation from Burda Principal Investments and General Catalyst. Novartor and Burda also invested in the new round. Besides its VPN, the company also works on the NordPass password manager and the NordLayer enterprise remote access networking.  Nord operates in over 20 countries and employs 2,000 people globally.

4 Transfr, which works on virtual reality tools for career development, announced a $40M Series C led by ABS Capital. The startup claims it has facilitated close to 400,000 training simulations.  More: "In less than three years, the company has grown from serving customers in only one state to working with nonprofit, public sector, and enterprise partners in more than 40 states," said Transfr CEO and founder Bharani Rajakumar. The company plans to add foreign language offerings, including training courses in Spanish. A PwC study found that VR was 52% more cost-effective in a classroom of 3,000 corporate learners. Deloitte estimates that 25% of company meetings will have a VR element by 2024.

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5 Generative AI for cybersecurity startup Nexusflow announced a $10.6M Seed round led by Point72 Ventures, with participation from Fusion Fund. This gives the company a $53M post-money valuation.  More: Nexusflow synthesizes data from security sources and uses tools via their APIs to get results for natural language commands.  The company plans to use the funds to double its team to 20 full-time employees by the end of the year. Nexusflow was founded by UC Berkeley computer science professor Jiantao Jiao, former director of machine learning software at SambaNova Jian Zhang, and former CTO at Synopsys Kurt Keutzer.

6 AI-powered brand and marketing content creation platform maker Jasper hired Timothy Young to succeed outgoing CEO Dave Rogenmoser. Rogenmoser, who is also Jasper's co-founder, will help Young transition into the role over the next two months.  More: Young was previously a president at Dropbox and vice president of product and engineering at VMware.  Rogenmoser will retain his post of the chairman of Jasper's board.  The Austin-based startup laid off an undisclosed number of employees earlier this June.  Jasper has raised $143M from investors to date, of which it raised $125M less than a year ago when it crossed a valuation of $1.5B.  VMware, Pfizer, and Anthropologie are some of Jasper's most notable clients.

7 Quick Hits: No-code development is here to stay according to industry experts. Gartner predicts 80% of technology products will be built by those who are not IT professionals by 2024.* AI-powered drug discovery and product development biotech Evozyne closed its Series B funding round at $81M. Fidelity Management & Research and OrbiMed co-led the funding round, supported by NVentures, Paragon Biosciences, and Valor Equity Partners.  Freight technology and transportation service company Loadsmart acquired NavTrac, a firm building computer vision for yard, terminal, and asset management, for an undisclosed sum.  Identity and access management startup ProofID acquired identity governance and administration solution Regatta Solutions Group for an undisclosed sum.  So far in Q3, tech startups in India have raised $1.5B in VC funding, which is 29% lower QoQ and 54% lower YoY.  NEXT WEEK in LA, redefine development at DockerCon! Use DCHALF for 50% off in-person registration, or participate online for free. Come learn with us!* *This is sponsored content.

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Karan Chafekar Analyst Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot.  Nicolas is a Sr. Analyst at Inside, covering startups and transportation trends. He is an avid map maker and data nerd. Nicolas has worked in the shared-scooter space, as well as advised e-bike and moped start-ups.  This newsletter was edited by Vibha Chapparike

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Epic Games announces layoffs / Disney to launch password-sharing crackdown / PC market shows signs of future rebound

Plus: OpenAI is seeking up to $90B in a potential share sale.

Inside Tech For September 28, 2023

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Welcome to Inside Tech! Here are today's top stories: Fortnite maker Epic Games is cutting 16% of its workforce. Disney Plus will begin cracking down on password sharing in Canada. Canalys data shows possible rebound in the U.S. PC market. If you find value in this newsletter, please consider sharing it with friends and colleagues. Your support is appreciated. Beth p/beth-duckett

1 Epic Games is reducing its workforce by 16%, impacting 830 employees, as part of a larger cost-cutting move. The "Fortnite" developer also plans to divest Bandcamp, its music platform, and spin off the majority of SuperAwesome, its "kid-tech" company.  More: In a memo, CEO Tim Sweeney explained that the company had been overspending in the pursuit of growth and the metaverse. Epic already reduced expenses by cutting marketing and events but ultimately decided that layoffs were needed for financial stability, he wrote. The company is now selling Bandcamp, its music platform acquired last year, to Songtradr, a music licensing platform. Its advertising business for SuperAwesome, which offers kid-friendly services, will also become an independent company under the same SuperAwesome brand. The company said its main priority is now delivering the upcoming Fortnite Season and Fortnite Chapter 5, as well as its projects codenamed Del Mar, Sparks, and Juno.

2 Disney will begin its password-sharing crackdown for streaming services on Nov. 1 in Canada. Last month, Disney CEO Bob Iger said the company was actively exploring solutions to tackle account-sharing among Disney Plus subscribers. More: In a new email to Canadian subscribers, Disney announced restrictions on sharing an account or login credentials beyond the subscriber's household.  The Canadian subscriber agreement now includes an "account sharing" section, saying that failure to comply would result in account restrictions or even termination. The company didn't specify plans to limit password sharing in other markets. Zoom out: Starting Oct. 12, Disney is also raising the prices of its ad-free subscription plans of Disney+ and Hulu. The moves are expected to boost revenue after Disney reported fiscal Q3 streaming losses of $512B, about half the $1.1B loss from a year earlier. Q: How do you think Disney's crackdown could impact the competitive landscape of streaming services? Join the conversation here.

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3 The latest Canalys data reveals a positive trend in the U.S. PC market, with a modest 6% decline in total PC shipments in Q2 2023. This was a "significant improvement" compared to earlier quarters, a sign that the PC market is poised to rebound following the post-pandemic slump, according to Canalys. What the numbers show: In Q2 2023, notebook shipments dropped by 4%, totaling 15.2 million units, partly offset by higher demand for Chromebooks in education. Chromebook shipments reached 4.7 million units, the highest level since early 2021. Meanwhile, desktop shipments fell by 12% to 3 million units, and the tablet market decreased by 5% to 10.3 million units. Ishan Dutt, Principal Analyst at Canalys, attributed the promising Q2 figures to factors like cleared channel inventories, increased demand from education, federal funding, and ChromeOS licensing changes.  What's next: While still a decline, the data suggests a possible turning point in the PC market, with growth expected in 2024 and 2025. Canalys forecasts a slight 4% decline in Q3 2023 but anticipates strong 12% growth in Q4, bolstered by a more favorable macroeconomic landscape, the Windows 11 tranisition, and more AI-capable PCs. The longer-term outlook is more optimistic, with 9% growth expected in 2024 and 12% in 2025.

4 Apple has asked the U.S. Supreme Court to overturn a 2021 court ruling that would alter its App Store policies, focusing on the part of the dispute that favored Epic Games. Meanwhile, Epic has also requested the Supreme Court to review part of the case that favored Apple. More: In 2021, Epic lost most of its antitrust trial against Apple, with the court ruling in Apple's favor on nine out of 10 counts. That lower court's order forces changes to Apple's App Store rules, allowing app developers to direct users to alternative payment methods, bypassing Apple's up to 30% revenue cut. Apple is now asking the Supreme Court to review that one anti-steering count that it lost. Zoom out: Apple' request comes a day after Epic appealed to the U.S. Supreme Court to review the 2021 ruling that cleared Apple of antitrust violations. The Supreme Court will determine in the coming months if it will consider Epic's and Apple's appeals. If neither petition is accepted, the previous rulings will remain in effect.

A message from our sponsor, Klue. Competitors are killing your efficiency We spoke with over 300 revenue leaders to understand how they’re navigating difficult market conditions. One of the most interesting pieces of data: 91% said that their deals were more competitive than last year. Deals and renewals are heating up. There are more people chasing less pie. That’s a major obstacle to what leaders also said were their top three priorities: Hitting revenue targets Retaining customers Improving sales performance If your business isn’t preparing to compete effectively today, your revenue numbers are going to look grim at your next board meeting. Read and listen to how these leaders are navigating a tough, competitive market to hit their targets in our latest report When the Pie Shrinks. Read the report

5 Meta introduced new AI services at its Connect event, including an AI assistant and chatbot for WhatsApp, Facebook Messenger, and Instagram. The company is also launching 28 AI characters across messaging apps, featuring celebrities like Charli D'Amelio, MrBeast, Snoop Dogg, and Paris Hilton. More: Meta AI, currently in beta, is an advanced conversational assistant. It provides real-time information through a partnership with Microsoft Bing and includes an image generation tool using Meta's Emu model. The company is also adding 28 other AI chatbots to its services, each with unique backstories and personalities, some portrayed by cultural icons and influencers. For instance, Tom Brady becomes Bru, a "wisecracking sports debater who pulls no punches," and Dwyane Wade becomes Victor, an "Ironman triathlete motivating you to be your best self."

6 OpenAI, the maker of ChatGPT, is currently in discussions for a potential share sale that could place the company's valuation at as much as $90B. The valuation would mark significant increase from its valuation of nearly $30B earlier this year. More: OpenAI has reportedly started pitching the deal to investors. According to the Wall Street Journal, the deal is expected to allow OpenAI employees to sell their shares rather than the company issuing new ones.  If finalized, it would be OpenAI's second major secondary share sale. Earlier this year, the company closed a $300M share sale at a $27B-$29B valuation. Zoom out: The news come after OpenAI said it anticipates generating $1B in revenue this year and several billion more in the following year. Its revenue primarily comes from user fees for ChatGPT and licensing its large language models to businesses.

7 Quick Hits:  No-code development is here to stay according to industry experts. Gartner predicts 80% of technology products will be built by those who are not IT professionals by 2024.* GameStop has appointed billionaire activist investor Ryan Cohen as CEO, chairman, and president without a salary, following the firing of former CEO Matthew Furlong in June. The SEC is nearing settlements with around two dozen Wall Street firms, including Carlyle Group, Apollo Global Management, and Blackstone, over their use of private messaging apps like WhatsApp for official discussions.  The U.S. Army has granted Palantir Technologies a contract worth up to $250M for AI and machine learning research through 2026, with order-specific details yet to be finalized. NEXT WEEK in LA, redefine development at DockerCon! Use DCHALF for 50% off in-person registration, or participate online for free. Come learn with us!* *This is a sponsored post.

Upcoming Events OCT 16 Meet Our Fund 5, Building and Investing in AI San Mateo, California Save Your Seat * This is a sponsored event

Knowledge Hub Term of the Day Backorders: Backorders refer to orders placed for products that are currently out of stock. Read More Question of the Week Do you share details about your salary with your coworkers? Join the conversation

INSIDE TECH LEADERBOARD (7 DAYS) 🥇 Ayhan Ergezen (21) 🥈 Jon Lusty (9) 🥉 Heidi Roberts (7)

Beth Duckett AI and technology writer Beth is the writer of Inside's AI and Tech newsletters, with a career spanning journalism and editing since 2007. She has written for publications including The Arizona Republic, USA Today, and others, and authored a book on the solar industry in 2016. Reach out to her at Beth.Duckett@yahoo.com. This newsletter was edited by Eduardo Garcia

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