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Musk’s 10-month-old baby, xAI, is closing in on a massive $6 billion funding round. Social network X, aka Twitter — also part of Elon’s tech family — is already a shareholder. The deal was originally supposed to raise just $3 billion, but then everyone wanted in and the price went up. Investors include Musk’s BFFs from Sequoia Capital, Future Ventures, and a few other friends who might also be joining this AI party — they’re all pretty bad “You can’t sit with us” girls at this point. What really frustrates me, though, is how smug Musk probably is about all of this. It’s okay, I’m bitter about nothing my startups ever raised $6 million—never mind three orders of magnitude higher.
Sure, it may be on the eve of being exiled from the US entirely (although, I hasten to add, the previous administration tried that too, and TikTok is still here, it’s possible), but TikTok can be sneaky in more ways than one. ways. Word on the street (or should we say web?) is that TikTok is playing a little hide and seek with Apple. Instead of giving Apple a 30% cut for in-app purchases, it appears they are trying to direct users to purchase their digital tip coins directly from their website. But shh… it’s a secret! The feature is apparently only visible to certain users (they’re looking at you, high spenders). Will Apple give them the boot like they did Fortnite? Only time will tell.
Your founding team sucks: In a brutally honest conversation with me at TechCrunch Early Stage, Tom Blomfield, former founder of Monzo Bank and current Y Combinator partner, spilled the beans on venture capitalist decision-making. He says investors are looking for unicorns that can deliver 1,000x returns – anything less is an epic fail. They are not just judging your business model or product. No, they are watching you to see if you have what it takes to make their cash multiply like rabbits.
The most interesting startup stories of the week
Hello? Is this the iPhone? Why are you so quiet today? Image Credits: Vectorian/Getty Images
Oh, EyeEm, you sly dog! The erstwhile “Insta-challenger” photo-sharing app based in Berlin, which almost went belly-up last year, has found a new way to milk its users — by training future overlords of AI! Yes, they sell your snaps to train machine learning models. Users were graciously given 30 days to pack up their digital photo albums and climb, or shut up (and turn in their photos) forever. But do you opt out? It’s not as easy as swiping left on Tinder — you have to manually delete your photos. But wait… the real kicker is if you furiously decide to delete your account completely, with no more payments to you. Womb-womb, sad trombone.
It’s like “Game of Thrones”, but in the world of technology. Welcome to the latest season of Techstars, where CEO Maëlle Gavet is fighting on all fronts in her kingdom! It has a bank collapse, an international shutdown acceleration program, and nasty LinkedIn posts. And that’s just for starters. Throw in the conundrums of Swedish labor law and you’ve got more drama than an episode of The Real Housefounders. As if that weren’t enough, she’s also facing a company-wide revolt against her reign, along with cost-cutting measures that lead to a toxic work culture and hiring people with as much startup experience as my pet goldfish. (He died in 2007. RIP, Knee-mo.) Stay tuned for this thrilling saga of power struggles, corporate drama, questionable finances and strategy — I can’t guarantee dragons or White Walkers, but there will be plenty of breath and frozen sparkles!
Some fun outings
Mark Cuban wrote a check to Truffle Shuffle. No one will comment on whether it was a good exit for the company. Image Credits: Christopher Willard/ABC via Getty Images
Rubrik, the cybersecurity company, decided to take a leisurely stroll down Wall Street this week, and BAM! Shares rose 16% in their public debut. They were initially priced at $32 per share (just above their target range) and settled at $37 by the end of trading. Now that’s one way to get in! That little jaunt took their valuation from $3.5 billion in 2019 to a whopping $6.6 billion today. Not bad for a company that isn’t even profitable yet! Their secret sauce? Subscription revenue — increased from 73% to 91% in just one year. But, hey, who needs profitability when you’ve got stickies, right? While this may seem like the start of an IPO parade with Reddit and Ibotta leading the conga line, potential rate cuts could bring the party to a head soon. No doubt Greylock is laughing maniacally all the way to the bank.
ButcherBox, the meat-obsessed startup that drove $600 million in revenue, just sunk its teeth into “Shark Tank” favorite Truffle Shuffle. The acquisition is less about competition and more about helping ButcherBox customers stop burning their steaks. Truffle Shuffle was born out of sheer desperation when founders Jason McKinney and Tyler Vorce found themselves with $20,000 worth of truffles but no restaurants to sell them to, thanks to our dear friend COVID-19.
The most interesting fundraisers this week
RevenueCat founders Miguel Carranza (L) and Jacob Eiting (R). Image Credits: RevenueCat
- Here, kitty, kitty: RevenueCat, the fairy godmother of app subscriptions, just raised $12 million to expand its magical web realm. Pur-fect. It powers 30,000 apps and manages over $2 billion in annual subscriptions. Noise.
- Like a folding phone, but more home: Step right up, guys! Backflip just grabbed $15 million to help real estate investors flip houses. Because why sweat it out doing good old fashioned physical labor when you can just throw some cash at the problem and watch your property value do the work out?
- Sure, I think AI needs some more dollars: The OpenAI Startup Fund is at it again, quietly raising $15 million from two investors who clearly enjoy their anonymity (hmmmmm). Ian Hathaway, the fund’s manager and sole partner – why share the fun – was quoted in the documents. Remember last year when eyebrows were raised after it was revealed that OpenAI CEO Sam Altman had all the say? They said it was “temporary” but this caused some drama!
Other Unmissable TechCrunch Stories…
Bad news for healthcare privacy this week. UnitedHealthcare’s CEO says “maybe a third” of US citizens were affected by their recent hack, and Kaiser also pissed off a bunch of customer data. Hey, thanks, clown.
Anyway. Here are some other stories that are fun. It can. Or at least interesting. Or maybe they just received a traffic metric this week. Who knows what my selection criteria are, but… just read the stories, okay?
- So the cloud makes rain: Google Cloud is rolling in the dough. The business unit just beat Wall Street’s expectations with a whopping 28% growth, riding high on insatiable demand for AI tools backed by cloud infrastructure.
- Everything is “go to”… No, not like that!: Welcome to another episode of “Autopilot Antics” starring Tesla and the National Highway Traffic Safety Administration (NHTSA)! After a compelling investigation into hundreds of crashes where drivers were treating Autopilot like an experienced chauffeur instead of an assistance system, NHTSA closed the case with 13 tragic, fatal rollovers.
- I’m just filling in this part of the newsletter: iPadding, that is. Just when you thought Apple might have had its fill of glitzy product reveals, they’ve secretly planned another event. Rumor has it we’re getting a new iPad Pro and Air, an updated Apple Pencil and keyboard case combo. I’ll be there to report back with the hardware team — stay tuned.
- The soup is terrible and the portions are tiny (ahem): Meta’s new AI chatbot, Llama 3, has been released to the world. He’s like that party guest who returns random web search results without excelling at anything in particular. But hey, it’s free!
- I wish this was around when I was learning English: Google proves once again that it’s not just for stalking your exes and settling conversations about trivial matters. They’re testing a new feature called “Speech Practice” that uses AI to help users converse in English, and no, it doesn’t involve talking about the weather or asking where the library is.
