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Alex Wilhelm 0:10
Hello, and welcome back to Equity, the TechCrunch podcast where we unpack the numbers and nuances behind the headlines. This is Alex. Good morning. Today is February 21, 2024. Welcome to our Wednesday show, where we look at critical startup and venture capital stories from the week so far. Now, if you were with us yesterday, you’re probably asking, “Hey, it’s a holiday week, has enough happened to warrant another show?” And the answer is, yes, a lot has happened and we will talk about it.
On today’s show we’ve got AI in language learning, a neat startup looking to automate due diligence, Reddit IPO news, and then two new ventures for your notebook. Let’s go!
0:54
First on the docket for the startup category, we have a company called Loora. This is LOOR A. Why is he in the news? Well, the company announced today that it just closed a $12 million series A. Loora, whose namesake is the Arabic word for language, offers students various conversational topics and scenarios generated by artificial intelligence, think sports technology, business , fashion, books, TV, that sort of thing. The round was led by QP Ventures, bringing the company’s total raised capital that we know of to approximately $21.25 million.
The position behind companies like Loora is that they believe AI can do at scale what language teachers can’t. Loora itself relies on conversational AI to teach students and has created an iOS app that allows people to speak to an AI chatbot that then gives them feedback on their understanding of English. According to one of the company’s co-founders, Roy Mor, the idea for Loora came from their own frustration with learning the language. And they think language learning apps today are aimed at beginners or casual learners and people who want a human teacher to be better or a little more expensive. So they want to split the difference and make a tool that is cheap and available.
Okay, I really get it. And I think that’s really cool. At the same time. I wonder if we are all learning to speak from digital robots? Will we be that good at talking to each other? I do not know. I mean, it’s cool. But people converse, because that’s how language was created. On the other hand, human teachers are costly. And if you want to have better language skills, and there is a way to use artificial intelligence to help more people learn faster at a lower price. I really can’t complain about that. I mean, sure, I’m as outraged as anyone that Duolingo recently cut its workforce and replaced it with some of these AI translators. But I also think that when you weigh the short-term costs and the long-term benefits, the trade-offs here are pretty clear. And I think products like Loora are indicative of what we should expect to see more of in the future from other companies as well.
2:59
The next startup I have on our list I believe we talked about when he was at YC. But now we have more. And that company is Dilli. It’s a platform that attempts to automate the core steps of investment due diligence and portfolio management for private equity and venture firms using, predictably, AI. It just raised a $3.6 million funding round from Allianz Strategic Investments, Rebel Fund, Singularity Capital and others.
Now, there are obvious dangers in using AI to perform tasks designed to reveal potentially negative information that some want covered up. But there are also risks of people doing the same. See the historical record. Human due diligence has occasionally missed important things in big deals. But I suspect that many tasks in the curating world are honest and not so creative. So using artificial intelligence or machine intelligence in general makes sense. And Dilli isn’t the only dog barking at this particular tree. Gartner predicts that by 2025, more than three-quarters of VC and early-stage investor executive reviews will be informed by artificial intelligence and data analytics. Expect to see more of this rather soon.
Dili claims to have built a neat enough technology to help its business stand out from other efforts. And I would say avoid commercialization. Dili co-founder Stephanie Song told TechCrunch that her company has, and I quote, “built custom document-specific indexing and retrieval pipelines to provide its models with high-quality context.” Why does this matter? Well, it means deli can copy data from unstructured documents, which is pretty cool and clears work for people. The proof will be in the revenue pudding, but I appreciate what Dili is doing and the little joke it’s called contains.
4:47
At the top I promised you Reddit IPO news and I’m here to deliver. The Wall Street Journal reports that Reddit plans to reserve a piece of stock in its upcoming IPO for 75,000 of its most active users. Okay, a few things here. First, the fact that this kind of story is getting out is an indication that Reddit is actually making progress toward going public, no BS, this time, it probably will. I’ll say an 80% chance. Essentially, this is a smoke and fire situation. If we see stories coming out about Reddit’s IPO process, it means that the IPO process is really moving forward.
Second, that we’re not done seeing bits of innovation in the IPO process. After the SPAC collapse, you might think that innovation in the act of going public is a bad idea. But what tech companies and their peers outside the industry often have are dedicated users who make good if they’re not traditional IPO investors. So let’s let Reddit run this experiment before we judge it. It may be that the primary users of a service are even better initial public shareholders than institutions. Conventional wisdom says no, no, it’s not. But then again, who cares what the conventional wisdom says? We expect a Reddit S-1 in March, which is just around the corner. And no, I’m not jumping up and down in my chair to demand that March get here sooner.
6:11
Before we talk venture capital news, I have one more startup note for you. And it’s a company called Bioptimus. It’s like bio and optimus combined with an ‘o’. And TechCrunch writes that it wants to apply everything we’ve collectively learned about AI models in recent years with a narrow exclusive focus on biology. The company just raised $35 million and is a spin out from a company called Owkin. But he wants to build fundamental AI models for biology. I just have to say it sounds awesome. What a great place to apply new technology so we can better understand how we live and how we can live better. I dig it.
6:51
Before I send you off to your workday, I have two venture capital stories for you. The first concerns food technology. And now we’ve seen venture capital flows into food tech investments slow along with the overall venture capital industry. But Bluestein Ventures isn’t letting that slow it down. The Chicago-based early-stage venture capital firm closed on $45 million in capital commitments for Fund Three. So you know I like this because it’s early stage. It’s Chicago and I love to eat. Now founded in 2014, Bluestein Ventures is actually a bit of a family affair. It is co-hosted by Andrew Bluestein and the Bluestein family office is the first pair of chapters. What is notable about this third fund is that it also includes external capital.
7:38
And to close us Partec closed its second fund in Africa called Partech. Africa with a vehicle of 280 million euros or just over 300 million dollars. And this news comes barely a year after TechCrunch first reported that at its size Partec Africa is the largest venture capital fund dedicated to African startups. And they have actually raised more than they originally hoped for. It had targeted €230 million, so it ended up with €50 million for good, and it’s good that it raised more because Africa needs the capital. It has seen a noticeable decrease in venture capital activity since the start-up boom in 2021. The good news is that project Africa plans to support more than 20 companies with initial investments ranging from $1 to $15 million.
And that’s our show for this oh-so-wonderful Wednesday morning. If you need even more from your friends here at equity. Well, we’re equity pods on X and threads and even TechCrunch bots on TikTok. My name is Alex I’m Alex over at X we have two sister shows of course Chain Reaction and Found to listen to. We’ll be back on Friday. I’ll talk to you then. Goodbye.
8:52
Equity is hosted by me, Alex Wilhelm, and TechCrunch Senior Reporter Mary Ann Azevedo. We are produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our illustrator and a big thanks to the audience development team and Henry Pickavet who manages TechCrunch audio products. Thank you very much for listening and we will talk to you next time.
