Washington’s political class doesn’t know Y Combinator exists — yet

Washington, D.C., may be the hub for legislation and regulation that affects startups, but many people in the city don’t know anything about one of the more prominent accelerators fueling the industry: Y Combinator. Speaking at a TechCrunch Strictly VC event on Tuesday evening, YC Head of Public Policy Luther Lowe said the startup incubator is looking to raise its profile in Washington.

Lowe, who joined the accelerator last fall from Yelp, where he was SVP of Public Policy, said his role at YC is something like “YC 101” for the Washington crowd.

“So many folks in D.C. don’t actually know what it is,” he remarked.
Founded in 2005, Lowe called YC the “original accelerator.” He explained its roots in the industry to the crowd at the event, noting that the accelerator was co-founded by Paul Graham, who had successfully sold a company in the 1990s and was helping founders by writing essays to help them avoid pitfalls. When Graham put out a call for startup applications, a dozen startups got into YC’s debut class. Reddit and Twitch came from that initial cohort, and the program kept growing in the years since.

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Court halts Byju’s second rights issue as $200M fundraise falters

Byju’s is having a hard time raising the full $200 million from its rights issues that its founder had previously claimed was oversubscribed. And now India’s National Company Law Tribunal has restrained the company from proceeding with its second rights issue amid allegations of oppression and mismanagement by its shareholders.

The Tribunal on Thursday also ordered the company to maintain status quo on its existing shareholdings until a petition filed by two of its investors, General Atlantic and Sofina, had been dealt with. Rights issues allow companies to raise capital by giving shareholders the opportunity to purchase additional shares at a discount, in proportion to their current stake.

Byju’s had launched its first rights issue in late January, but a court order directed the company to not tap the funds it had raised through that rights issue after many of its investors opposed the fundraise. The Bengaluru-headquartered startup had launched the fundraise after struggling to raise cash amid allegations of lapses in corporate governance, and that rights issue pretty much demolished its valuation to about $25 million, which is an astonishing decline from the $22 billion price tag the startup once enjoyed.

The startup recently sought to raise money again from another rights issue as it scrambled to pay employees and continue operations, but that effort has now been stalled.

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Why being the last company to launch in a category can pay off

When Jordan Nathan launched his DTC nontoxic cookware company, Caraway in 2019, he knew he was not the only founder trying to sell a new brand of pots and pans to millennials scrolling through Instagram. But he found that launching after his peers ended up being a blessing in disguise in all areas but one.

When Caraway launched, it joined companies like Our Place, Great Jones and Made In Cookware in an increasingly crowded category of online cookware startups. But being a little late to the party allowed Caraway to see what other brands’ products and target audiences were, Nathan said. This allowed Caraway to change its approach and try to fill the gaps these brands were leaving open.

Nathan said that Caraway initially planned to source its pans off the factory shelf, and target millennials who were looking for something nicer than what you’d find at IKEA but not quite at the wedding registry stage yet. It seemed that every other DTC cookware brand had the same idea, so Caraway shifted gears and instead focused on wedding registries and beyond, spending a little more time and effort on their product design.

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360 One acquires Times Internet’s ET Money for $44 Mn

Wealth and alternates-focused firm 360 One (formerly IIFL Wealth) has acquired Times Internet-owned wealth management platform ET Money for about Rs 365.8 crore ($44 million).

360 One has paid Rs 85.83 crore as cash consideration while the rest of the payment was done through the issue of 35,90,000 fully paid-up equity shares, the filings accessed from National Stock Exchange shows.

The proposed acquisition shall require prior approval of the Securities and Exchange Board of India, stock exchanges, and the apex banking body Reserve Bank of India, the filings further added.
360 One will take over two entities Moneygoals Solutions Limited (ET Money) and Banayantree Services Limited (ET Money Genius). While ET Money provides business advisory, product management and other business support services, ET Money Genius distributes financial products like FD, NPS, Insurance, P2P lending and advisory.

For the fiscal year ending in March 2024, ET Money and ET Money Genius had a turnover of Rs 2 crore and Rs 28.7 crore, respectively.

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Ethereal Machines raises $13 Mn led by Peak XV and Steadview

Advanced manufacturing startup Ethereal Machines has raised $13 million in a Series A round led by Peak XV Partners and Steadview Capital. Existing investors Blume Ventures, Enam Investments, and Sandeep Singhal also participated in this round.

The funds raised will be utilized for R&D, building multi-axis CNC controllers and constructing its second smart factory in the next 12 months, Ethereal said in a press release. This new factory will span 250,000 square feet on the outskirts of Bengaluru.

Founded by Kaushik Mudda and Navin Jain, decade-old Ethereal Machines produces precision engineering components via its proprietary multi-axis CNC machines. Its machines enable precision engineering components to be produced at fast and cost-effective rates. 

Ethereal caters to customers from the USA, Europe, Israel, and India. As per the company, it has manufactured precision components for numerous emerging companies in the deep-tech sector, including space-tech, drones, medical diagnostics, and thermal imaging.

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India’s Oyo, once valued at $10B, finalizes new funding at $2.5B valuation

Oyo, the Indian budget-hotel chain startup, is finalizing a fresh fundraise of about $100 million to $125 million that slashes its valuation to $2.5 billion, two people familiar with the matter. 

That’s a steep decline in the Gurgaon-headquartered startup’s value, which was worth $10 billion in 2019. The startup, struggling to raise from institutional investors, has been aggressively pitching high-net-worth individuals in recent months.

“We genuinely feel that this asset makes a lot of sense today. Being profitable and @70% discount to the previous valuation. Listing expected in 18-24 months,” a representative of InCred, a financial firm working with Oyo, pitched in a message to a startup founder.

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Bitsensing raises $25M for its high-resolution radar in autonomous driving

Self-driving vehicles rely on many sensors to detect objects and the world around them. The conventional approach is to work with cameras and lidars. But some tech companies and startups have built advanced high-resolution radar technology for autonomous vehicles, also known as 4D imaging radar.  

Among them is a South Korea-based startup called bitsensing. The startup says its 4D imaging radar is not just for autonomous driving but can also be applied to smart cities and digital healthcare, and it closed a $25 million Series B round for the high-resolution radar technology.

Bitsensing was founded in 2018 by Jae-Eun Lee, CEO of bitsensing, a former senior research engineer who led South Korea’s first mid-range 77GHz Advanced Driver Assistance System (ADAS) for vehicles at Mando Corporation, a Korean Tier 1 supplier.

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After 20 months of trying to raise funds, insurance startup Loop cuts staff

Loop, the car insurance company co-founded by Harlem Capital co-founder John Henry, has laid off staff as the company struggles with fundraising. 

Henry took to Instagram to post the email his co-founder Carey Nadeau sent to impacted staff on June 16th. Nadeu also posted the letter to LinkedIn. It stated that this was the “absolute last resort” for the company after it had been unsuccessful in raising additional capital after 20 months of trying. “Our last opportunity,” Nadeau wrote, “had an investor pull out at the very final hour, and we just fell short.” 

The email continued, saying the company decided to reduce its headcount as it seeks to operate through its financial difficulties. It’s unclear how many people were impacted. However, according to a LinkedIn post by a former employee, the cuts impacted people who were insurance agents, as well as people in customer care, data analytics, marketing, software engineering and product.

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Ex-HubSpot exec builds an AI-powered CRM that learns for you, with $4M seed led by Sequoia

Christopher O’Donnell has hobbies. He likes music and playing guitar, but above all, he loves building software. Which is why three years after leaving HubSpot, he built Day.ai, a CRM for the age of AI.

Unlike modern CRMs, which are essentially giant spreadsheets that somebody needs to populate and keep updated, Day learns everything about a person from conversations they had with the company, emails and public records such as LinkedIn.

O’Donnell knows CRMs. He was responsible for creating one of the most popular ones out there, HubSpot’s.  

O’Donnell spent more than 10 years at HubSpot, initially turbocharging the company’s marketing automation solution, and was later tapped by the founder and former CEO Brian Halligan to build HubSpot’s customer relationship management tool.

That CRM later became the product HubSpot is best known for, which eventually helped earn O’Donnell the title of chief product officer.

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‘Lawyer-in-the-loop’ startup Wordsmith wants to bring AI paralegals to all employees

Wordsmith, a fledgling Scottish legal tech startup, has somehow managed to attract the backing of two well-known venture capital firms. The startup targets in-house legal teams and law firms with an AI platform that they can configure to help other workers in the company. This way, anyone in the company can solicit help with legal tasks such as reviewing contracts and answering specific questions about a document.

Incorporated in October last year, the Edinburgh-based company is the handiwork of former senior TravelPerk executives Ross McNairn(CEO) and Robbie Falkenthal (COO), alongside CTO Volodymyr Giginiak, who served in various engineering roles at Microsoft, Facebook and Instagram. Six months after leaving their previous positions, Wordsmith already claims notable customers, such as Trustpilot, while it’s partnering with at least one major law firm — DLA Piper.

This early traction has garnered the attention of global VC firm index Ventures, which has led a $5 million seed investment into Wordsmith alongside General Catalyst and Gareth Williams, founder and former CEO of Scottish tech unicorn Skyscanner.

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Quick commerce Zepto raises $665 Mn at $3.6 Bn valuation

Quick commerce company Zepto has raised $665 million in its Series F round from new investors Avenir, Lightspeed, and Avra (Anu Hariharan’s new fund), among others. Existing investors Glade Brook, Nexus, and StepStone co-led the round with Goodwater and Lachy Groom doubling down their stakes as well.

The Mumbai-based company turned unicorn in August last year after raising $200 million in a Series E round led by venture capital firm StepStone. It also raised $35 million more in the same round.

As per the company, it has been valued at $3.6 billion (post-money) in the fresh round, up from $1.4 billion during the last round. The firm has raised more than $1.2 billion to date.

The mammoth funding will help Zepto compete with other two deep-pocketed players, BlinkIt and Swiggy Instamart. Unlike the West, quick commerce operators in India claim to have found a sustainable model.

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How 2 high school teens raised a $500K seed round for their API startup

Just a few weeks ago, 18-year-old best friends Christopher Fitzgerald and Nicholas Van Landschoot graduated from high school. 

While most teens their age would be living it up in their last summer before college or the adult jobs that await them, Fitzgerald and Van Landschoot are hunkered down in a VC office in Boulder, Colorado.

They’re spending the summer working on their startup APIGen after they raised a $500,000 pre-seed investment from Varana Capital. Fitzgerald will head off to Penn State in the fall and Van Landschoot will move near the university but is putting his college plans on hold to be a full-time startup founder.

The money was raised while they were still in high school after a prototype for their idea garnered a lot of interest among the large Boulder community of AI enthusiasts. 

APIGen is working on a platform that will build custom APIs from natural language prompts. It will be able to, for instance, allow an e-commerce business to simply ask for an API that connects its web front end to its database, and the platform will deliver it. 

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Prosus zeroes out its 9.6% stake in Byju’s

Prosus, one of Byju’s largest investors, on Monday said its once-$2.1 billion worth stake in the Indian edtech startup is now worth nothing, but it is still hopeful that the formerly most-valuable Indian startup can be salvaged.

The largest external investor in Byju’s with a 9.6% stake, Prosus said in its quarterly report that its stake in the startup is now worth zero “due to the significant decrease in value for equity investors.” Prosus Group CIO, Ervin Tu, said on an earnings call that the firm is still hopeful about Byju’s outlook, but improving governance at the Indian firm will be key.

The Indian edtech giant has had a difficult couple of years as it grappled with a series of financial and governance setbacks that have tarnished its reputation and imperiled its future. The startup’s woes were amplified last year when it failed to meet financial reporting deadlines and ultimately reported revenues well below its own projections.

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Fearless Fund’s founder has resigned, and it’s a sad reflection on the VC world for Black women

On Monday, Fearless Fund’s co-founder Ayana Parsons announced that she was stepping down from her leadership role from the firm. She will no longer be its general partner and COO but will be off “enjoying island life” with her family, she said in a LinkedIn post. She co-founded the fund in 2019 with partner Arian Simone, who remains its CEO.

Fearless Fund was founded with a mission to provide venture capital financing, grants and financial education to startups founded by Black women. That’s a demographic that is both particularly underserved and promising. Less than 1% of all VC dollars in 2023 went to Black-founded startups, which amounts to around $661 million out of $136 billion.

So Fearless Fund is doing exactly what venture capitalists are supposed to do: find an overlooked area (in Silicon Valley (they might call it taking a “contrarian view”) and invest. The fund has so far invested $26 million into over 40 companies that include Slutty Vegan, The Lip Bar, Partake Foods, and Live Tinted, Atlanta Daily World reports.

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Dappier is building a marketplace for publishers to sell their content to LLM builders

When Napster emerged in the late 1990s, it made it easy for people to grab music files without compensating the content owners. The iPod and the iTunes music store changed that by allowing artists or publishers to get paid for reusing their content in a digital context. Fast-forward to today, and there are companies scraping content to train large language models without permission.

Dappier, an early-stage startup, wants to ensure that publishers get paid when their content gets used, and today announced a $2 million seed round and the launch of a marketplace where publishers can set a price for using their content in model training.

Dappier co-founder and CEO Dan Goikhman, calls his company a monetization stack for the emerging AI internet, providing a new way for publishers and data owners to get compensated for reusing their content.

“Our goal is to help media companies and information providers monetize their content as it’s being leveraged by emerging AI agents and platforms all around the world.” “The idea basically is, how do you create a payment infrastructure for content as it’s distributed?”

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Directo turns a TikTok travel hack into a deal-finding Chrome extension

A travel hack that went viral on TikTok teaches users how to save money on hotels and Airbnbs by booking directly with the properties themselves. Now, a new startup, Directo, will help travelers find those same deals with the help of a Chrome extension that points you to the property’s website, where you’ll often find discounted rates as the property doesn’t have to pay commission on those sales.

Across social media, creators and influencers post variations of a money-saving hack that teaches users how to find a cheaper way to book a room or a home stay. This often involves using reverse image search on photos of the listing to find the property’s website — something that can be particularly useful when booking longer stays where the savings can really add up.

Of course, booking directly may have its risks. You may not have the same travel assurances and protections compared with bigger websites, like Booking.com, Expedia or Airbnb. But when travelers are looking at savings in the hundreds of dollars or more, they often opt to take their chances.

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Hebbia raises nearly $100M Series B for AI-powered document search led by Andreessen Horowitz

Hebbia, a startup using generative AI to search large documents and return answers, has raised a nearly $100 million Series B led by Andreessen Horowitz, according to three people with knowledge of the matter. 

The round valued the company between $700 million and $800 million, although TechCrunch couldn’t verify whether that valuation is pre- or post-money. (One possible scenario is $700 million pre/$800 million post.) Hebbia disclosed in an SEC filing in May that it had by then raised $93 million out of a hoped-for $100 million, but we understand from two of the people that the round hit a near $100 million mark and has closed.

Hebbia and Andreessen Horowitz didn’t respond to a request for comment.

Hebbia was founded in 2020 by George Sivulka, who launched the company while working on his PhD in electrical engineering at Stanford. Sivulka was inspired by his friends working in the financial industry who told him that part of their long work weeks was spent searching for information in SEC filings and other dense documents. Sivulka thought that AI could help them save hours at the office and give them more time for rest and sleep.

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Illumex is using GenAI to ease pain of getting good data into LLMs

By now we know how crucial it is to have quality data for use by large language models (LLMs), but getting data ready for the models has been an early challenge for companies, an opening that represents an opportunity for an enterprising entrepreneur.

Enter Illumex, a two-year-old Israeli startup from the former VP of AI at Sisense. The startup is using GenAI to put the data into a ready state for LLMs. Today the company announced a $13 million investment.

Inna Tokarev-Sela, founder and CEO of Illumex, says she recognized this data readiness problem years ago, and she started Illumex with the goal of making it easier for organizations to organize data in an automated way.

“We automatically associate the business logic of an organization, automatically mapping it to data, and we bring the relevant data to the questions which business users have,” Tokarev-Sela told.

The company is combining a number of technologies to achieve this, including generative AI, graph databases and relational databases, pulling all this information together into what Tokarev-Sela calls a data fabric, which companies can access to train LLMs and for other purposes.

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Synthflow picks up $7.4M for no-code voice assistance for SMEs

What is AI good for? Automating repetitive tasks for the very busy people running small businesses, reckons Berlin-based startup Synthflow, which is announcing a $7.4 million seed round for its SME-focused no-code platform for AI voice assistance.

Since being founded around spring last year, the startup has now banked a total of $9.1 million, underscoring ongoing investor enthusiasm for accelerating applications of generative AI.

The startup also claims to be approaching 1,000 customers — touting “double-digit” monthly growth rates since it stepped out of stealthy development to launch its browser-based “no code” tool in December 2023. That suggests there’s a healthy appetite among SMEs to adopt — or at least experiment with — generative AI tools that promise easy-to-reach productivity gains.

The new funding will be plowed into R&D, according to Synthflow CEO and co-founder Hakob Astabatsyan, who says the team is keen to keep stoking its early momentum by increasing product utility and broadening the scope of SMEs to which it’s appealing.

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Gifting on-demand startup Afloat goes nationwide

Afloat, a gift delivery app that lets you shop from local stores and have gifts delivered to a loved one on the same day, is now available across the U.S. The startup announced on Monday that it is rolling out its service nationwide after previously only being available in select cities, including Atlanta, Dallas, Charleston, Fort Worth, Kansas City, Nashville, and Wichita, among others.

The startup was founded by Sarah-Allen Preston after she experienced the stress of her newborn undergoing open heart surgery. After receiving thoughtful gifts from loved ones, Preston wanted to make immediate gift-giving possible for everyone, including those who live in another state, to support their loved ones in a time of need. 

“When I looked back on that experience, though, I weirdly didn’t remember the stress and the heartache. All I remembered was how people showed up for me and how cared and supported I felt… So, I took that feeling and went on to amplify this in the world through technology.”

Afloat aims to provide the convenience of online shopping and instant delivery while also supporting local businesses without leaving your home. Afloat takes care of the entire gift-giving process, including gift wrapping and adding a handwritten note for an extra personal touch. (Preston mentioned that this is more thoughtful than receiving a typed Amazon receipt.) As for the delivery part, DoorDash drivers take care of that. 

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Beauty tech startup BoldHue raises capital to ship its ‘Keurig for makeup’

Have you ever wanted a personalized makeup dispenser? Well, BoldHue‘s co-founder and CTO Karin Layton has built just that: A device that aims to be the “Keurig for makeup.”

BoldHue’s device essentially scans your face and dispenses a customized foundation formula that matches your skin tone. The beauty tech startup on Tuesday said it had raised a $3.37 million round led by Lucas Venture Group, with participation from Mark Cuban and others. 

Layton, a former aerospace engineer for Raytheon, thought of the idea when she was getting ready for work one day and realized her new expensive foundation bottle didn’t match her skin tone. As a painter in her free time, Layton decided to combine engineering and her knowledge of color theory to create the first of many prototypes. 

The countertop-sized device, to be priced at $295 upon release, operates using a “wand” that you place on different parts of your face to capture your skin tone. The device uses a proprietary skin typing algorithm to analyze your skin type and create the correct foundation shade using five pigments: blue, black, red, yellow and white. It will then dispense a week’s worth of foundation. 

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