Startups Weekly provides a weekly summary of significant happenings in the startup sector. The past week saw a mix of promising developments and challenges. While there was a new IPO filing, the overall outlook for exits remains bleak. New funding rounds occurred, though founders expressed frustration over the scarcity of capital. Amidst these circumstances, some venture capitalists are successfully creating liquidity and raising funds for potential future upswings.
Key Startup Narratives of the Week:
Throughout the week, startups displayed a blend of confidence and vulnerability, with even experienced founders facing difficulties.
IPO Filing: Design software company Figma proceeded with filing confidential paperwork for an initial public offering, despite concerns that led both Klarna and StubHub to delay their IPOs due to a stock market downturn following tariff announcements. Nonetheless, Figma is not without its challenges, as it recently issued a cease-and-desist letter to rising competitor Lovable over the term "Dev Mode."
Frustration in the U.K.: Founders in the United Kingdom voiced their dissatisfaction regarding the increasing disparity in funding between British startups and those in Silicon Valley. Data from Dealroom indicated that British startups secured just £16.2 billion (approximately $21.5 billion) last year compared to around $73.8 billion (£65 billion) in the U.S.
Closure: Smashing, an AI-driven reading curation app established by Goodreads’ founder Otis Chandler, closed its operations due to unsatisfactory growth.
Service Suspension: BluSmart, an Indian Uber alternative utilizing electric vehicles, appeared to halt its services following an investigation by the Securities and Exchange Board of India into Gensol Engineering, which shares its co-founders.
New Developments at Bolt: Ryan Breslow, having resumed his role as Bolt’s CEO a month ago, launched a new "super app" representing his vision for the fintech company established in 2014.
Litigation Challenges: Rippling’s attempts to subpoena Deel CEO Alex Bouaziz have been complicated by his and his lawyer’s current location in the UAE. Rippling is also seeking information from Revolut regarding the alleged payoff of Deel’s supposed spy.
Potential Acquisition: OpenAI is reportedly exploring the acquisition of Windsurf for $3 billion. The startup, formerly known as Codeium, is known for its popular AI coding assistant competing with Cursor and similar services.
Venture Capital and Funding Updates:
Recent announcements suggest progress towards more prosperous times, with higher valuations and larger funds becoming less of a rarity.
Marshmallow Raises Funds: The British insurance startup Marshmallow raised $90 million in equity and debt, achieving a valuation slightly above $2 billion. The company focuses on segments overlooked by traditional insurers and insures a million drivers, with a profitable annual revenue run rate of $500 million.
Hammerspace Funding: Hammerspace, which aids clients like Meta in utilizing their unstructured data, raised $100 million to expand its operations. Sources indicate a valuation over $500 million.
Chapter’s New Funding: Chapter, a Medicare advisory startup co-founded by former U.S. Republican presidential candidate Vivek Ramaswamy, secured $75 million in a funding round, valuing the company at $1.5 billion.
Investment in Phantom Neuro: Austin-based Phantom Neuro received $19 million to advance its technology for amputees, which involves a subdermal device allowing control over prosthetic limbs.
Conifer’s Seed Round: Conifer, a startup developing electric hub motors that do not rely on rare earth elements, raised a $20 million seed round from deep tech investors.
Arnergy’s Expansion: Clean tech startup Arnergy, backed by Bill Gates’ Breakthrough Energy Ventures, completed a $15 million Series B extension to enhance solar energy access in Nigeria.
Founders Fund’s New Growth Fund: Peter Thiel’s Founders Fund closed its third growth fund at $4.6 billion, a notable increase from the previous $3.4 billion growth fund, signaling a possible shift from a bearish to bullish market.
Venture Capital Liquidity Strategies: Venture capitalists are adept at discovering liquidity opportunities absent IPOs. In a recent episode of StrictlyVC Download, Hans Swildens, CEO of Industry Ventures, discussed how firms are navigating this scenario.