Startup Monday: Latest tech trends & news happening in the global startup ecosystem (Issue 142- October 19)
Welcome to Startup Monday, my weekly newsletter that recaps the week in the global startup ecosystem. To have this newsletter emailed to you, you can sign up here.
Top startup news to follow this week:
1. Acrew Capital hits five years, raises $700M
Acrew Capital has raised $700 million in fresh funds.
The San Francisco-based venture capital firm announced in a blog post on Thursday that it raised $700 million to invest in companies building in data and security, healthcare, or fintech. This fundraise brings the firm’s assets under management to $1.7 billion.
It’s unclear how much of the $700 million will go to the firm’s early-stage strategy, which invests $1 million to $15 million into seed and Series A companies, and how much will go for its discovery strategy, which cuts checks of $10 million to $20 million for Series B and Series C companies.
This news comes as the firm turns five years old, a milestone worth celebrating during a particularly tough year for venture funds and fundraising. So far this year, U.S. VC firms have raised $65.1 billion across 305 funds, according to PitchBook data. While 2024’s fundraising totals are on track to surpass 2023, it will still pale in comparison to any year past 2019.
The firm was likely still able to fundraise in these tougher conditions due to its notable portfolio so far.
Acrew has seen multiple exits so far, including corporate spending platform Divvy, which sold to BILL for $2.5 billion in May 2021, and creator platform Superpeer, which was acquired by Skillshare for an undisclosed amount earlier this year, among others.
The firm is also investors in notable private companies, including At-Bay, an insurance cybersecurity startup that was last valued at $1.3 billion, and Pie Insurance, a small business insurance startup, that PitchBook estimates is valued at nearly $1 billion.
2. Generative AI startups get 40% of all VC investment in cloud amid ChatGPT buzz
Generative artificial intelligence startups are getting 40% of all the venture capital funding that flows into cloud companies, according to venture investors Accel.
In its latest annual Euroscape report, which looks at key cloud and AI trends, Accel said that venture funding for cloud startups based in the U.S., Europe and Israel is projected to rise to $79.2 billion this year, with artificial intelligence fueling much of the recovery.
Venture funding into the cloud industry climbed 27% annually — marking the first year of growth in three years. Cloud startups raised $62.5 billion in Europe, Israel and the U.S. in 2023, the report found.
Funding is up 65% from the $47.9 billion cloud firms raised four years ago, according to Accel.
It comes after OpenAI, the Microsoft-backed company behind the buzzy generative AI chatbot ChatGPT, earlier this month raised $6.6 billion in a mammoth funding round that valued the startup at $157 billion.
AI is eating software
Much of the growth of funding in cloud is being driven by excitement around AI.
“AI is sucking the air out of the room” when it comes to cloud, Philippe Botteri, partner at Accel, told CNBC in an interview this week. “This is both visible on the public market and and the private market.”
As of Sep. 30, the Euroscape index — a selection of publicly-listed U.S., European and Israeli cloud firms curated by Accel — is up 19% year-over-year.
3. Byju’s founder says his edtech startup, once worth $22B, is now ‘worth zero’
Byju Raveendran, the founder of the embattled edtech group Byju’s, acknowledged on Thursday afternoon that he made mistakes, mistimed the market, overestimated growth potential, and that his startup, once valued at $22 billion, is now effectively worth “zero.”
Speaking to a group of journalists, Raveendran said the company’s aggressive acquisition of more than two dozen startups to expand into new markets proved fatal when financing dried up in 2022. Byju’s was planning to go public in early 2022 with several investment bankers giving the firm valuation as high as $50 billion, TechCrunch reported earlier.
HE alleged that many of his more than 100 investors had urged him to pursue aggressive expansion into as many as 40 markets. But, he added, those very investors got cold feet when global markets tumbled following Russia’s invasion of Ukraine, sending the venture capital market into a downward spiral.
Raveendran said many of his investors “ran away,” and the departure of three key backers — Prosus Ventures, Peak XV, and Chan Zuckerberg Initiative — from the company’s board last year made it impossible for the startup to raise additional funds.
Representatives of the aforementioned three firms as well as auditor Deloitte left the startup’s board last year, citing governance issues.
4. Crypto VC Market 'Tepid' as Q3 Investments Declined 20%, Says Galaxy Digital
Scared away by the various crypto collapses in 2022, institutional allocators have yet to make a comeback.
Crypto venture capital activity has remained quiet in 2024, in particular during the third quarter.
Venture capital firms invested $2.4 billion in cryptocurrency startups this quarter across 478 deals, according to a new report from crypto investment firm Galaxy Digital. That’s a 20% drop from the second quarter of the year in terms of funding, and a 17% decrease in the number of deals.
With $8 billion invested over the course of the year's first three quarters, the industry is on course to barely get more funding in 2024 than it received in 2023. Those numbers are a far cry from the deals that crypto reaped in 2021 and 2022, when the industry saw more than $30 billion across 3,000 deals each year.
“Allocator interest in crypto VC and venture capital more broadly is down from prior years,” Alex Thorn, head of firmwide research at Galaxy Digital, told CoinDesk, referring to the institutional allocators that venture investors themselves raise funds from.
The reasons for that lack of interest? High interest rates have made venture funds less attractive, Thorn said, and spot bitcoin (BTC) and ether (ETH) exchange-traded funds (ETFs) offer new avenues to gain exposure to crypto. Not to mention that the industry’s various collapses in 2022 are still fresh in everyone’s minds.
“This leaves venture investors struggling to find large sources of capital to launch new fund vehicles, leading to a tightening of the crypto venture investing market,” Thorn said.
But the ETF-driven market surge is “leading to increased competition among surviving crypto VCs for deal flow and putting entrepreneurs in the driver's seat when it comes to valuation,” Thorn added.
“It's a great time to be a founder if you can source investment capital,” he said.
5. Green Gravity, which is turning old mineshafts into energy storage, raises $9 million
A Wollongong startup converting disused mining shafts into long-duration energy storage has raised $9 million to turn the idea into reality.
Green Gravity was backed by HMC Capital, BlueScopeX, New Zealand’s Pacific Channel and SCAP H, a subsidiary of Japan’s Sumitomo Corporation.
BlueScopeX’s hosts Green Gravity’s demonstration plant at BlueScope’s Port Kembla Steelworks facility in a unique and world-leading approach to repurposing legacy mineshafts and works with global miners, energy companies and research institutes to scale up its technology.
The energy storage system is low-cost, long life and environmentally friendly, moving heavy weights vertically in legacy mineshafts to capture and release their gravitational potential energy.
The funding will see the startup focus on the engineering and physical testing of the system at scale for commercial deployment decisions, having built collaborative relationships with mine site owners including Yancoal, Wollongong Resources and CEVJ of Romania.
Founder and CEO Mark Swinnerton said the backing from offshore investors such as Pacific Channel and SCAP H shows global interest for the technology.
“This funding round, backed by a world class syndicate of investors, demonstrates the game changing impact Green Gravity is having on the renewable energy storage landscape,” he said.
“It will strengthen our team and enhance our capabilities, as we propel towards widespread commercial availability.”
Swinnerton said his institutional investors have “a unique blend of global technology knowledge, Australian manufacturing credentials, mining services expertise and large-scale listed infrastructure investment capacity” for his startup to succeed.
“The testing and engineering development Green Gravity has conducted over the past year has validated the attractive cost and sustainability profile of the technology,” he said.
“We expect to configure the gravitational storage technology for mid-duration storage applications of 4 to 24 hours, deliver 80% energy efficiency and to enable reuse of critical grid infrastructure. With more than 80 deployment options in review, we expect to make a major contribution to decarbonising the energy grid in the coming years.”
BlueScopeX partner Andrew Garey said: “Firmed renewable energy will be a critical part of decarbonising many industries, including steel. We are really excited to partner with companies like Green Gravity on the journey of scaling reliable, low-cost firming technologies.”
Recommended by LinkedIn
6. Swedish startup secures €32 million Series B1 to accelerate commercialization of wave energy technology
Stockholm-based CorPower Ocean has secured €32 million in Series B1 funding to advance its wave energy technology towards commercialization. The investment round was led by NordicNinja VC, SEB Greentech, and EIT InnoEnergy, with participation from Santander Alternative Investments, Iberis Capital, and Cisco Investments. The funds will support the deployment of CorPower’s wave energy converters (WECs), which have recently shown resilience against severe Atlantic storms while generating power. This financing aims to enhance the viability of wave energy as a mainstream renewable energy source, addressing challenges such as storm survivability and efficient energy generation.
In CorPower Ocean, 85 people from 22 countries have come together in one of the most ambitious efforts to bring utility scale wave energy to the world. The company currently has operations in Sweden, Norway, Portugal and Scotland, and is expanding to the US West Coast. Established in 2012, CorPower Ocean has now secured EUR 95m in funding from private and public investors and successfully demonstrated four generations of its unique technology, addressing the two main challenges which have held back commercial adoption of wave energy – 1. storm survivability and 2. efficient power generation in normal ocean conditions.
“Today’s announcement follows breakthrough results reported earlier this year from the firm’s ocean demonstration at the Aguçadoura site in northern Portugal, where the CorPower C4 became the first commercial scale wave device to successfully demonstrate the ability to survive the biggest Atlantic storms combined with a large power generation capacity with respect to the size and cost of equipment,” CorPower Ocean co-founder & CEO Patrik Möller said. “We’re hugely grateful for the support and confidence from this premiere group of investors who bring crucial experience and capacity to support our mission to power the planet with clean electricity from ocean waves. This financing combined with the technology breakthrough recently reported delivers a firm message about wave energy’s readiness for widescale adoption and its key role in the global energy transition.”
NordicNinja VC’s Managing Partner Tomosaku Sohara explains, “The CorPower Ocean team combines decades of wave-power experience and world-class company building ability to unlock untouched ocean resources in Europe, the US and Japan. We are excited to support CorPower Ocean as a lead investor, and this funding round is a strong testament to the team’s achievement and the momentum from the market.”
“The technical ability CorPower Ocean has demonstrated to survive the biggest Atlantic storms has been truly impressive. Wave power will finally meet the level of industrial expectations,” added NordicNinja VC’s Managing Partner Marek Kiisa.
Wave farm projects are being developed by customers using CorPower Ocean’s technology along the Atlantic Arc, including sites in Scotland, Ireland, Portugal and Norway. One project is being developed by Ireland’s state-owned energy supplier, ESB, off the coast of County Clare, following two decades of investigating a wide variety of technologies. The pre-commercial phase of the Saoirse Wave project, will involve CorPower Ocean WECs (Wave Energy Converters) as part of a CorPack cluster. The project has secured EUR 39.4m co-funding from the EU Innovation Fund.
InnoEnergy CEO Diego Pavia said, “Harvestable and accessible wave energy resources in the world amount to 500GW, with availability and predictability way above wind and solar. As such wave energy is a must to have to supply the 24/7 green electricity, we need to decarbonize the energy and industrial system. CorPower Ocean has consistently demonstrated the energy ratings and maintainability it promised, also in harsh environments. With this financing round, we speed up the commercialisation phase.”
Markus Hökfelt, Investment Director SEB GreenTech VC said, “This truly is an amazing team of people encompassing world leading engineering skills, know-how, determination and drive, led by a CEO in Patrik Möller with the top qualities that we look for as investors. By providing the support and funding they need, CorPower Ocean will make wave power a reliable, cost competitive and scalable energy source.”
Wave energy represents one of the largest untapped clean energy sources, amounting to more than all of today’s hydro or nuclear capacity. Significant resource lies along the European Atlantic, US west coast, South America, Africa, India, Indonesia, Australia, New Zealand and Japan. Local jurisdictions are fast adopting wave energy targets, including the UK and Portugal, with the US recently proposing new instruments to ramp up commercialisation and industrial development.
7. London-based Cult Mia expands seed funding to over €4.6 million to accelerate global expansion
UK-based luxury retail platform Cult Mia completes a seed funding round, raising over €4.6 million to fuel its global expansion and strengthen its position as a leading destination for independent luxury fashion.
Founded by Nina Briance in 2019, Cult Mia has seen consistent triple-digit growth since its launch. This latest raise comes after a highly successful summer, with Q3 2024 sales surpassing 200% growth compared to 2023, while operating at three times the efficiency of marketplace peers. Cult Mia integrates style-led brand and product curation with data-driven insights, creating an ecosystem that benefits both its customers and brand partners.
This funding, supported by investors including H&M Group Ventures, Morgan Stanley, Fuel Ventures, and David Wertheimer, will enable the company to scale its operations, particularly in high-growth markets such as the US and the Middle East, and continue to deliver a curated, values-driven shopping experience to its growing customer base.
Nina Briance, Founder & CEO of Cult Mia said: “The rapid growth we’ve seen, along with the loyalty from both customers and brand partners, reaffirms our belief in the platform’s potential to become the independent luxury fashion destination for the world. This investment will allow us to accelerate our global expansion, particularly in high-growth markets like the US and Middle East.”
Cult Mia now joins H&M Group Ventures’ portfolio of pioneering retail innovations within the Innovative Fashion/New Retail category, alongside brands like Goop, A Retro Tale, and Laced. This addition highlights Cult Mia’s potential to dominate the luxury e-commerce landscape.
“We are delighted to invest in Cult Mia on their mission to promote independent and diverse designers from around the world,” said Nanna Andersen, Chief of New Growth & Ventures at H&M Group. “We’ve been incredibly impressed by what Cult Mia has achieved in such a short time.”
The US remains Cult Mia’s largest market, with 109% year-on-year growth, followed closely by the Middle East, which has seen a 413% year-on-year increase. The UK, Cult Mia’s home market, continues to show strong growth with a 115% year-on-year increase.
This new investment will support Cult Mia’s rapid expansion into new markets, with a strategic focus on the Middle East, which has quickly become the platform’s second-largest market, experiencing over 400% growth year-on-year in Q3 2024.
Mark Pearson, Founder & Managing Partner at Fuel Ventures, added: “We’ve been incredibly impressed by Cult Mia’s performance since our initial investment. The company has achieved 4x GMV growth over the past 12 months, with significant improvements across all key metrics, from customer retention to brand partnerships. Their ability to defy industry trends and scale sustainably highlights their unique positioning and future potential.”
8. Paris-based dottxt raises €11 million to make LLMs speak the language of every application
dottxt, an ecosystem and platform for interacting with LLMs, announced a combined raise of €11 million in funding, following the completion of both pre-seed and seed rounds in just over seven months. The financing will chiefly be used to grow the team after demand for dottxt’s open source library and its proprietary, optimized, counterpart has sharply increased since early 2024.
The funding is split into a €3 million pre-seed round, completed in December 2023 and led by European tech and deep tech VC firm Elaia. dottxt quickly followed with a seed round, which closed in August 2024 at €8 million and was led by EQT Ventures.
Further participants in the two funding rounds include Seedcamp, Common Magic, Kima, FSJ, Roxanne Varza (Station F), Erik Bernhardsson (Modal Labs, CEO), Julien Chaumond (Hugging Face, CTO), Bob van Luijt (Weaviate, CEO) and Jean-Louis Queguiner (Gladia, CEO).
dottxt greatly improves the capabilities of LLMs. By allowing the user to request information with a specific structure, dottxt transforms LLMs into tools that integrate seamlessly with existing digital ecosystems.
dottxt’s functionality elevates LLMs from simple back-and-forth chat functions to dependable computers. Data scientists can make natural language queries to a database with a guarantee that the query will succeed. Someone looking to hire and facing a mountain of CVs can ask the service to filter through looking for specific experience or qualifications, saving significant time. Someone looking to extract specific attributes from a large bank of images can send the service the images and list of attributes and get the information back quickly.
The explosion in AI-based chat models in recent years has been responsible for the steep increase in awareness of AI technology, which is now discussed worldwide. OpenAI and Cohere are early leaders in the race to dominate AI-based text generation; both have previously and publicly cited their use of the dottxt open source code.
Rémi Louf, CEO at dottxt, said: “Everyone will be using structured generation in a few years, there is no doubt about that. Model providers, including OpenAI, are lagging in terms of speed and capabilities, and we’re here to fill that gap. With these funds, we will keep pushing the limits of this technology and make it more widely available for everyone. We are shaping a future where generative AI delivers on the kind of automation we were promised.”
Co-founders Rémi Louf, Dan Gerlanc, and Brandon Willard have worked together in various capacities for the past four years. During their last stint at a New York-based AI firm, Normal Computing, they started encountering issues with GPT-4, notably extracting data and information in a systemized order to bypass vast amounts of manual work. It was in solving this issue that the team ultimately invented a solution that no one else had been able to find, thanks to their unusual background in statistical modelling and compiler technology.
A year later, the code they open-sourced has received over 3 million downloads, 600,000 of which were in the last month. Companies, large and small, are using it in production.
Julien Hobeika, Partner at EQT Ventures, added: “From our first discussion with dottxt, we saw their potential to turn the stochastic nature of LLMs into something more programmatic and deterministic, enabling deep integration into software systems. This aligns with our belief that the future of AI agents will be shaped by those who can build the essential frameworks that make LLMs truly usable at scale in critical enterprise systems. We’re excited to support dottxt as they lead the creation of this critical infrastructure.”
The funds will be used to expand the team, bolster the number of software engineers, and bring in a Chief of Staff. Currently, at nine, the team has added six more employees, who will be focused on expanding the reach of dottxt’s technology and distributing it to enterprises and developers alike.
9. Stockholm-based node.vc closes €71 million fund to drive a founder-first Nordic ecosystem
node.vc, a Nordic early-stage venture capital firm led by veterans of leading startups and scaleups (including eye tracking scaleup Tobii and Tobii Dynavox and video game pioneers Paradox Interactive), has closed a €71 million fund, to double down on building an ecosystem for entrepreneurs.
Cornerstone investors in the new fund include Stockholm-based Saminvest (a venture capital company formed by the Swedish government in 2016, committed to establishing new and sustainable ventures), as well as several leading Nordic institutional investors, underscoring broad confidence in node.vc’ approach to venture capital. node.vc has built an investor base that includes more than 70 entrepreneurs.
Notable backers of the new fund include founders of Axis Communications, Yubico, Polarium, Cint, Evolution, PriceRunner, and Polar Structure. The Stockholm-headquartered VC firm’s investment philosophy is built on the power of becoming a node for the Nordic startup ecosystem, ensuring that the firm’s investor community is equipped to help identify, evaluate, and support portfolio companies.
node.vc Managing Partner John Elvesjö said: “The node.vc team started as founders and operators ourselves, we know what it takes to build and scale successful companies. That’s why we always put founders first; node.vc is creating an ecosystem where entrepreneurs back entrepreneurs. Our approach is simple – when we invest in a company, we bring much more than capital. Having been in the founders’ shoes ourselves, we know the challenges first-hand and deeply respect the journey. Our aim is to partner with founders, giving them the full weight of our experience, networks, and insights. With the incredible group of investors we’ve brought together, we’re certain we have built the largest entrepreneur-backed early-stage VC in the Nordics, all within one fund structure.”
node.vc’s investment strategy revolves around building a founder-first ecosystem, where the firm leverages its extensive entrepreneurial network to identify, support, and scale innovative tech companies. The firm’s sector-agnostic approach is guided by the belief that disruptive innovation can emerge from any industry. To date, the firm has already made three investments in Sweden: Lemonado, a no-code platform for building software and apps; Roro, a creative play studio; and Starhive, a next-generation unified data management platform for enterprises.
The firm’s thesis is based on the power of collaboration, connecting successful entrepreneurs with early-stage founders to accelerate growth and increase the probability of success. As the global landscape of work, innovation, and entrepreneurship evolves rapidly, node.vc stands at the intersection of disruption and growth. The firm is committed to identifying and backing companies leading change across various industries, whether it’s reshaping virtual work, driving the future of AI, or unlocking new frontiers in interactive entertainment and enterprise technology.
Cornerstone investor Saminvest CEO Magnus Skåninger added: “node.vc has the team and vision to deploy capital across the ecosystem in such a way that drives a new wave of entrepreneur-backed success. They are well-positioned to execute on the best investment opportunities across the tech landscape.”
10. Paris-based Gladia raises €14.7 million to launch multilingual real-time audio transcription and analytics engine
Gladia, an AI transcription and audio intelligence provider, has completed a €14.7 million Series A funding round. The company will use the funding to develop an end-to-end audio infrastructure – starting with a new real-time audio transcription and analytics engine – enabling voice-first platforms to deliver more value to their users across borders with cutting-edge AI.
The Series A funding round was led by XAnge, with participation by Illuminate Financial, XTX Ventures, Athletico Ventures, Gaingels, Mana Ventures, Motier Ventures, Roosh Ventures, and Soma Capital. Founded in 2022, Gladia has now raised a total of USD $20.3 million, with earlier seed investments headed by New Wave, Sequoia Capital (as part of the First Sequoia Arc program), Cocoa, and GFC.
“Gladia represents the qualities we like to champion at XAnge: a bold, global tech team at the forefront of AI innovation, with a proven business model to unlock new opportunities across industries,” said Alexis du Peloux, Partner, XAnge. “In a fast-paced AI environment, Jean-Louis Quéguiner and his team have executed extremely well, and we are proud to back Gladia for the Series A.”
“I founded Gladia for a very personal reason – I was frustrated that existing audio transcription services were not able to understand my French accent,” explained Jean-Louis Quéguiner, CEO and Co-Founder, Gladia. “Our international team and customers often switch between languages during meetings, but finding a transcription solution that can handle different languages and accents simultaneously was impossible.”
Given that most speech recognition models today are trained predominantly on English audio data and are therefore inherently biased, Gladia prioritized building the first real-time product that is truly multilingual. The new fine-tuned engine delivers advanced real-time transcription in over 100 languages, along with enhanced support for accents and the unique ability to adapt to different languages on the fly.
Gladia’s new engine is unique in its ability to extract insights from a call—like the caller’s sentiment, key information, and conversation summary—in real-time. This means it takes less than a second to generate both transcript and insights from a call or meeting using Gladia.
Building an accurate, low-latency, and multilingual engine in-house is a complex and resource-intensive task. It requires extensive expertise in language understanding, real-time data handling, with continuous optimization and maintenance. Real-time models require more computing power and may struggle to produce accurate output immediately due to limited context.
Gladia’s new product allows companies to bypass these challenges. The real-time speech-to-text engine boasts an industry-leading latency of under 300 milliseconds without compromising accuracy, regardless of the language, geography, or tech stack used.
“Companies are spending valuable time and resources trying to incorporate multiple AI functions into their existing platforms,” added Jonathan Soto, Co-Founder and Chief Technology Officer, Gladia. “Our single API is compatible with all existing tech stacks and protocols, including SIP, VoIP, FreeSwitch, and Asterisk. This allows us to easily integrate real-time transcription and analysis into our customers’ AI platforms, so they can focus on delivering the best services to their end users.”
Gladia will use the new capital to advance its R&D efforts and soon bring to market a one-stop AI toolkit for audio and expand its product offering with additional à la carte models—including large language models (LLMs) and retrieval-augmented generation (RAG). With several design partners in the contact-center-as-a-service (CCaaS) segment, the company is currently piloting an agent-assist solution powered by Gladia’s real-time AI engine. Additionally, Gladia will continue to expand its talent base as it prepares for international expansion.
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