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The Rivian came out with a promise to revolutionize the way we think about trucks and SUVs, but now it’s hit a slight snag. In a move that screams, “Oops, we might have gotten a little ahead of ourselves,” the company announced it is laying off 10 percent of its workforce. Why do you ask? Well, it looks like the EV market is a little more disappointing than expected, with price pressure building like the suspense of a bad thriller. Rivian is now faced with the harsh reality that making cars is hard and making them profitable is even harder. The current round of layoffs follows 6% of staff laid off a year ago and another 6% that came around 18 months ago.
The manufacturer is said to be launching the R2 series vehicles early next month, which is supposed to improve the company’s profit margins somewhat.
As Rivian navigates these troubled waters, one can’t help but wonder if this is just a bump in the road or a sign of more ominous clouds on the horizon. Who needs soap operas when you have the EV market?
The most interesting startup stories this week
Image Credits: Hivemapper
Staying in the automotive world, there has been a lot of movement from the vanguard of EV manufacturers.
Lucid Motors, in a valiant attempt to make lemonade out of the lemons that were its 2023 sales, has decided to cut prices across its line of electric sedans. The traffic shouts “Please look out for us!” in a market where being the new kid on the block (Lucid was founded in 2007) is about as profitable as a skateboard in a Formula 1 race. The entry-level Lucid Air Pure, which previously flirted with the $80,000 mark, now bats its eyelashes at potential suitors with a more affordable $69,900. This comes after a rather humble admission that the company only managed to deliver 6,001 cars in all of 2023. The company at one point predicted it would ship 90,000 cars in 2024 — it looks like the actual number will be a tenth of that.
It’s not just the new kids on the block who are struggling. Founded 104 years before Lucid, Ford, in a move that echoes the playground tactic of “if they can do it, so can we,” has decided to cut prices on its electric Mustang Mach-E in response to the of demand for premium EVs. It seems the electric vehicle market is experiencing a reality check, with consumers suddenly remembering that money doesn’t grow on trees, even if those trees are saved by driving electric cars.
These price adjustments from Ford and Lucid come on the heels of price cuts by EV industry poster child Tesla, suggesting that the EV market is maturing and customers are becoming more price conscious.
Electric Motorcycle Fire Sale: The owner of a Florida retail store collected most of the Swedish electric motorcycle brand Cake’s US inventory, including all Makka and Ösa motorcycles, accessories and parts that had arrived stateside. The cake itself is headed for bankruptcy.
Despite their rage, they’re still just a rat in a Faraday cage: Struggling EV startup Faraday Future owes the landlord of its Los Angeles headquarters nearly $1 million after missing the past two months’ rent.
Keeping his eyes on the streets: Hivemapper, the company buzzing around the tech scene with its innovative mapping technology in an attempt to take on Google Maps, has just unveiled its latest creation: the Bee dashcam. This isn’t your ordinary camera: It’s designed to collect and share street-level imagery, contributing to Hivemapper’s global map.
The most interesting fundraising trends this week
Image Credits: Carol Yepes/Getty Images
Global investment firm Partech recently closed its second fund for Africa at $300 million, doubling its commitment to the continent’s growing tech ecosystem. The new fund aims to bridge the gap from seed to Series C funding rounds, providing a much-needed continuum of financial support for African startups. The fund’s strategy is not only to infuse capital, but also to offer strategic guidance and access to a global network, empowering startups to scale both within Africa and internationally.
Om nom nom: Bluestein Ventures, an early-stage venture capital firm based in Chicago, recently closed its third fund, with capital commitments of $45 million. Founded in 2014, the firm focuses on investing in consumer-facing technology across the food supply chain, including health and wellness, proprietary food technology, commerce and digital.
Ready Player 2: The global video game industry, despite its massive revenue exceeding that of movies and music combined, faced a tough year in 2023 with significant layoffs and a five-year low in venture funding. However, optimism remains high among VCs for a recovery in 2024.
That’s a big bag of moolah, folks: Moonshot AI, a rising artificial intelligence startup from China, has reportedly secured over $1 billion in a Series B funding round, setting a new record for the largest single funding round for a Chinese LLM developer. This financial boost pushes Moonshot AI’s valuation to an impressive $2.5 billion.
This week’s big trend: The AI train continues to rumble
Image Credits: OpenAI
OpenAI has introduced a new AI production model called Sora, capable of generating videos from text descriptions or still images. Sora stands out by creating high-resolution movie-like scenes that can include multiple characters, various movements, and detailed backgrounds. This model can also extend existing video clips by filling in missing details, showing a deep understanding of language and the physical world.
Sora’s capabilities extend to creating videos in a range of styles, including photorealistic, cartoon and black and white, up to one minute long — significantly longer than most existing text-to-video models. Despite some limitations, such as occasional inaccuracies in simulating complex physics or specific cause-and-effect scenarios, Sora’s output maintains a high level of consistency, avoiding the common pitfalls of “AI weirdness.” The model will probably not be released to the public.
In other OpenAI news, the US Patent and Trademark Office denied the company’s attempt to trademark ‘GPT’, ruling that the term is ‘merely descriptive’ and therefore unregistrable.
Yes, this checks: Dili, a platform designed to automate key investment due diligence and portfolio management steps for private equity firms and VCs using artificial intelligence, has raised $3.6 million in venture funding. The company aims to reduce the burden of due diligence tasks by leveraging genetic artificial intelligence, specifically large language models, to streamline investor workflows.
Is there anything else with AI that can help you today?: Sierra’s approach to customer service AI focuses on augmenting human agents rather than replacing them. The company believes that AI can handle routine and repetitive inquiries, freeing up human agents to focus on more complex and nuanced interactions with customers. The company has raised $110 million to date.
Focusing on XX: In a New York Times op-ed late last year, the Gray Lady broke down how the current boom in artificial intelligence came about. The piece went viral — not for what was mentioned, but for what wasn’t mentioned: women. We took a look at the women who are making waves in artificial intelligence.
Other Unmissable TechCrunch Stories…
Each week, there are always a few stories that I want to share with you, but somehow don’t fit into the above categories. It would be a shame if you missed them, so here’s a random goodie bag for you:
Onshoring: Don’t miss Aria’s amazing profile of Chris Power, founder and CEO of Hadrian, an industrial automation startup. He is on a mission to defy historical patterns of imperial decline through innovation in American manufacturing. Drawing on his observations of historical cycles where empires fall due to the outsourcing of key industries, Power embarked on a journey from Australia to the US in 2019 with a thesis that the US industrial base was in massive decline. In this decline, he saw an opportunity.
Give all your money: Ransomware has become a lucrative business model for cybercriminals, generating billions of dollars in revenue annually. This malware encrypts the victim’s data, making it inaccessible, and demands a ransom for the decryption key. Carly digs to see how such a lucrative criminal enterprise came to be.
Hello, this is Mr. I: Y Combinator’s latest request for startups (RFS) is worth a read, and not just because it’s been a while since the incubator shared the ideas and categories its partners “would like to see more people working on.” Including a request for more startups working on cancer treatments.
Domo arigato, robot brick: Bricklaying robots aren’t exactly an untapped idea, but Amsterdam-based Monumental specializes in the more well-known red clay variety and caught our reporter’s eye.
Confiscation of the means of production: Amazon, SpaceX, and Trader Joe’s recently took legal action challenging the constitutionality of the National Labor Relations Board (NLRB), potentially threatening national worker protections that have been in place for nearly a century.
