Welcome to Startups Weekly — your weekly roundup of everything you can’t miss from the world of startups. Sign up here to receive it in your inbox every Friday.
Not much news from me this week, but I’ve been doing a lot of prep for TechCrunch Early Stage in Boston on April 25th. It’s going to be a fantastic show and there’s still time to get early bird tickets if you’re quick.
The most interesting startup stories of the week
Stability AI is saying goodbye to its founder and CEO, Emad Mostaque, who has decided to pursue the dream of decentralized artificial intelligence, leaving the unicorn startup without a permanent CEO. The company, known for burning through cash faster than a teenager with their first debit card, is now in the hands of interim co-CEOs Shan Shan Wong and Christian Laforte. Mosaque, in a dramatic exit, went to X to proclaim that his departure was about fighting the bogeyman of “central AI” because, apparently, the real problem in AI is not rogue robots but who can check them.
Microsoft orchestrated a heist worthy of a Hollywood plot, snaring the co-founders and much of Inflection AI’s staff, along with the rights to use their technology, for $650 million. The deal, which to me looks more like a ransom payment than an M&A push, includes $620 million for the privilege of using Inflection’s technology and an additional $30 million to ensure Inflection doesn’t sue over the audacious grab of Microsoft talent. Microsoft board member and Inflection co-founder Reid Hoffman took to LinkedIn to assure everyone that Inflection investors will sleep well tonight, with early backers getting a 1.5x return and subsequent backers a modest 1.1x , despite the math not quite adding up. By the way, it’s pretty bold to describe a 1.5x return as “good upside” — most early-stage funds would be pretty unhappy.
- They said your data would be safe: Facebook (now Meta) got caught with its digital hands in the Snapchat cookie jar. Dubbed “Project Ghostbusters,” Facebook’s secret operation aimed to monitor Snapchat’s encrypted traffic, seeking to decipher user behavior and gain a competitive advantage.
- Robinhood’s New Credit Card: Robinhood has unveiled its Gold Card, a credit card so packed with features it might just make Apple Card users pause for a hot second. For the low, low price of being a Robinhood Gold member (because who doesn’t want to pay $5 a month for the privilege of spending more money?), you can also earn 3% to 5% cash back on everything.
- Could Nvidia be the next AWS?: Nvidia and Amazon Web Services (AWS) may just be the accidental heroes of the tech world, stumbling into their core businesses like a toddler finding a hidden stash of cookies. AWS found that it could sell its internal storage and compute services, while Nvidia found that its gaming GPUs were unexpectedly perfect for AI workloads.
Stability AI CEO resigns because “you’re not going to beat centralized AI with more centralized AI.” Image credits: David Paul Morris / Bloomberg
Trend of the week: Traffic problem
The New York Stock Exchange has floated EV startup Fisker, citing its “unusually low” share prices. It looks like Fisker’s financial runway is more of a tightrope, with shares down more than 28% in one day, a failed deal with Nissan (or so the rumor mill suggests), and a triggered repayment clause on their non-performing loans. they can afford. — painting a picture of a company teetering on the edge of a cliff. It wouldn’t have helped, of course, that the EV maker lost track of millions of dollars worth of customer payments.
- Can the Arrival scraps save Canoo?: Bankrupt Arrival is selling its remnants to Canoo, another EV hopeful on the edge of viability, in a deal that’s less about innovation and more about Canoo desperately trying to combine a production line with Arrival’s yard sale opportunities.
- Sowwy, guys: Steve Burns, the ousted founder, chairman and CEO of bankrupt EV startup Lordstown Motors, has settled with the U.S. Securities and Exchange Commission over misleading investors about demand for the company’s flagship all-electric Endurance truck.
- Letting the car drive itself for a month: Tesla is set to begin offering every customer in the US a one-month trial of its $12,000 driver assistance system, which it calls the Full Self-Driving Beta, provided they have a car with the compatible hardware.
Canoo is delivering a light tactical vehicle in 2022. Image credits: Canoo
The most interesting fundraisers this week
Super{set} is doubling down on its bet on boring but bountiful data and AI-driven startups, having just added $90 million to its war chest. This move comes on the heels of marketing firm Habu’s $200 million outlay on LiveRamp. The company is not your average business studio. With a modest portfolio of 16 companies and a penchant for turning venture capital notes from art to science, super{set} is on a mission to design practical applications. With their new digs occupying an entire floor of San Francisco’s 140 New Montgomery building, they’re not just investing in startups. they buy the future of the city itself.
Tired of cramped hotel rooms and owners with an aversion to IKEA, Alex Hatzielephariou decided to fill the gap himself. Fast-forward through a pandemic-induced boom in nomadic work, and Blueground is devouring the competition faster than a tourist at a free breakfast buffet. By acquiring companies such as Tabas and Travelers Haven, Blueground has expanded its empire to include over 15,000 apartments in 17 countries, proving there’s no place like a house you can book for a month. Despite the tech sector feeling the squeeze from rising interest rates, Blueground’s recent $45 million Series D funding round and a large debt facility suggest investors are still willing to bet big on Hatzieleberti’s vision for a world where everyone can live in a fully furnished apartment. at least temporarily.
- $10 million for the germ party: Wase built a compact system that processes the heavy by-products of breweries and food processing industries on-site and turns them into biogas. This is not your grandmother’s anaerobic digester. It’s a microbial rave, complete with electrically charged party bacteria wings, producing around 30% more methane and leaving behind less residue.
- More money for diversity: New Summit Investments is on the brink of a major leap in its investment journey, eyeing a $100 million target for its latest fund, downgrading its previous $40 million fund that closed in 2022.
- New Battery Chemistry: In an effort to get more capacity from electric vehicle batteries, automakers are increasingly turning to silicon. Ionobell, an early-stage startup that recently closed a $3.9 million expansion round, claims its silicon hardware will be cheaper than established competition.
Image Credits: Lyudinka/Getty Images (modified by TechCrunch)
Other Unmissable TechCrunch Stories…
Each week, there are always a few stories I want to share with you that 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:
- Erm, what?: Marissa Mayer’s startup, Sunshine, went from being Silicon Valley’s next big thing to pioneering the groundbreaking world of … contact management and photo sharing, leaving the Internet collectively scratching its head and wondering, “This is it? “
- Dude, where’s your data? Three years after a hacker’s “coming soon” teaser, 73 million AT&T customers’ personal information has been leaked online, and while AT&T plays the silent game, customers are left to verify their own data leaks like a dystopian DIY project.
- Come on, Apple: In a move that’s less about innovation and more about the gatekeeper game, Apple’s scrapping of Beeper’s attempt to bring iMessage to Android users is now a DOJ report on how to stifle competition and preserve the blue bubble club exclusive.
- Who needs privacy anyway: Glassdoor, the haven for anonymous company reviews, seems to have turned into a privacy nightmare by secretly adding users’ real names to their profiles, making “anonymous” the most ironic word in their lexicon.
- Welcome to Spotify University: Not content with just dominating your music, podcasts and audiobooks, Spotify is now eyeing your brain cells with its latest venture into e-learning, because apparently, we all need another reason to never leave the ecosystem of Spotify.
