DeepSeek or DeepFake
Stargate, Databricks, Phantom, Retro Bio, Instabase, Netradyne, Stackblitz, ShopMy, Clay, Highnote, Method Financial, Spaceium, Gravity, Bedrock Energy
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Hello from Miami
Today we have a lot of juicy stories and funding announcements. One call out, Emergence Capital, the infamous early-stage enterprise focused firm in SF with legendary hits such as Salesforce, Zoom, Box, Bill, Blend, Veeva, Doximity has two companies mentioned below, Method Financial & StackBlitz, anddd will be featured on the next Sourcery podcast. Stay tuned.
Anyways, starting with the one and only..
DeepSeek or DeepFake?
DeepSeek, a Chinese AI startup, has upended the AI market as we know it.
Ok, I’m just being dramatic, but tech is freaking out. Adding it’s another spicy twist to the frontier AI story. TLDR, DeepSeek, which was founded May 2023 by Liang Wenfeng, a figure in figure in both the hedge fund and AI industries, released DeepSeek-R1 and DeepSeek-V3 models, which have shown performance comparable to top-tier US models like those from OpenAI, Meta, and Anthropic, but at a fraction of the training cost.
DeepSeek-V3 was reportedly trained for $5.6 million, utilizing around 2.78 million GPU hours on less advanced H800 GPUs, in stark contrast to the billions of dollars US tech giants have poured into AI development. Not only that, but the company's chatbot app coincidentally became the most-downloaded free app on the iOS App Store in the United States. After learning nothing from the TikTok saga on national security. America continues to love cheap ‘spyware.’ Instead of going after more influencers, now, we’re going for the nerds. Scary. (Caveat, if you download the open source model and run it locally, no data goes back to China)
To put it in perspective, OpenAI's GPT models have cost upwards of $100 million to train, and collectively, US AI companies have proudly & loudly raised multi-billion dollar rounds for compute costs. With the recent glamorous example being the proposed $500 billion initiative named "Stargate" by OpenAI, SoftBank, and Oracle.. (just as we started to celebrate!) Because we need more money for compute. Right? Right?? This stark cost difference has not only disrupted market perceptions but also raised questions about the efficiency and necessity of such massive expenditures in the AI industry. Effectively ‘devaluing’ our darling American progress & international ability to raise a ton of money, in one shot.
Luckily, if this is all true, and they were able to train their open source model at a very low cost competitive to U.S. models, then the U.S. models have about a week to replicate it. And as a result, get to AGI first (aka our space race moment - which I mentioned on Pirate Wires).
Do we believe they actually did this for ~$6M? The Technology Brothers made a great point on their recent pod. We don’t know how/where/who they’re getting their training & inference compute from, or how much it actually cost. But guess what? It might just be free/sponsored from their country. This is the biggest question tweaking out Silicon Valley and Nvidia shareholders.
This is all to say, I certainly don’t know, I am not an expert.
Top X Posts:
What does this mean for Startupland? Tomasz Tunguz shares his thoughts
Musings
Macro
VC Returns Revealed: Thrive Capital Outperforms as Market Slowdown Hits VC Performance [Newcomer]
Now Wanted in Silicon Valley: Ho-Hum Businesses With Thin Profit Margins [WSJ]
Marc Bhargava of General Catalyst said his firm dedicated $1.5 billion to the strategy in recent years and is looking to write checks of at least $100 million for each project it backs. The firm has invested in seven startups pursuing AI-enabled rollups, including Long Lake and Crescendo.
DeepSeek
DeepSeek + Stargate Update [Technology Brothers]
How Chinese AI Startup DeepSeek Made a Model that Rivals OpenAI [Wired]
China’s DeepSeek AI dethrones ChatGPT on App Store: Here’s what you should know [CNBC]
AI
TikTok, Stargate [All-in]
Stargate, Executive Orders, TikTok, DOGE, Public Valuations [BG2 w/ Bill Gurley & Brad Gerstner]
OpenAI Stargate Joint Venture Demystified | Microsoft Sore Loser, Does Softbank Have The Capital?, Texas GigaCampus, Winners & Losers [SemiAnalysis]
More
Chamath Palihapitiya: Zuckerberg, Rogan, Musk, and the Incoming “Golden Age” Under Trump [TCS]
Chris Sacca — How to Succeed by Living on Your Own Terms [Tim Ferriss]
Top Interviews
Tomasz Tunguz, Theory Ventures, $688M AUM in 2 Years | Trillion Dollar AI Opportunity, OpenAI v Hyperscalers, Inference, Energy, Product Testing
Grace Isford, Lux Capital | NYC's AI Boom, Runway, Hugging Face, Sakana AI, Together AI
Impulse Labs, Trojan Horse for Battery-Powered Homes | Backed by Lux Capital w/ $25M Raised to Date
Last Week (1/20-1/24):
Relevant deals include the 70+ deals across stages below. I've categorized the deals below into seven categories, Fintech, Care, Enterprise / Consumer, HardTech, Sustainability, Acquisition/PE, and Fund Announcements, and ordered from later-stage rounds to early-stage rounds.
Highlighted VC Deals include:
Databricks, Phantom, Retro Bio, Instabase, Netradyne, Stackblitz, ShopMy, Clay, Highnote, Method Financial, Spaceium, Gravity, Bedrock Energy
Acquisitions & PE
Metropolis/Oosto, 23&me/Lemonaid Health, Sword Health/Surgery Hero, Autograph/Future, Infinite Reality/Obsess
Funds
Insight Partners, Good Spring Capital
Final Numbers
Most valuable companies at public listing & data center construction spend in U.S.
VC Deals
Fintech:
- Phantom, a San Francisco-based crypto wallet, raised $150 million in Series C funding. Sequoia Capital and Paradigm led the round and were joined by existing investors a16z crypto, Variant, and others.
- Highnote, a San Francisco-based payments platform, raised $90 million in Series B funding. Adams Street Partners led the round and was joined by existing investors Oak HC/FT, Costanoa, WestCap, and Pinegrove Venture Partners.
- Fundment, a London-based investment management platform for financial advisers, raised £45 million ($55.5 million) in Series C funding. Highland Europe led the round and was joined by ETFS Capital.
- Vertice, a London-based spend optimization platform, raised $50 million in Series C funding. Lakestar led the round and was joined by Perpetual Growth, CF Private Equity, and existing investors Bessemer Venture Partners and 83North.
- Method Financial, an Austin-based financial connectivity platform for lenders, raised $41.5 million in Series B funding. Emergence Capital led the round and was joined by avra, Samsung Next, and existing investors Andreessen Horowitz, Y-Combinator, and Ardent Venture Partners.
- 1Money, a New York City-based stablecoins payments network, raised $20 million in seed funding from F-Prime Capital, Galaxy Ventures, Hack VC, and others.
- Olé Life, a Miami-based insurance provider in Latin America, raised $13 million in Series B funding. PayPal Ventures led the round and was joined by Mundi Ventures, AV8, and Advent Morro.
- Renown, a remote onchain user experience tools provider formerly known as WalletConnect, raised $13 million in Series B funding. USV and 1kx led the round and were joined by Shopify Ventures, Kraken Ventures, Crypto.com Capital, and others.
- Baton, a New York City-based small and medium-sized business acquisitions marketplace, raised $10 million in Series A funding. Obvious Ventures led the round and was joined by Burst Capital, FJ Labs, Fluent Ventures, 75 & Sunny, and existing investors Divergent Capital, Bloomberg Beta, and Zeno Ventures.
- Tapestry, a New York City-based Solana ecosystem social infrastructure platform, raised $5.8 million in Series A funding. Union Square Ventures and Fabric Ventures led the round and were joined by Stellation Capital, Slow, and Foresight Ventures.
- MoneyHash, a New York City-based payment orchestration platform in the Middle East and Africa, raised $5.2 million in pre-Series A funding. Flourish Ventures led the round and was joined by Vision Ventures, Arab Bank's Xelerate, Emurgo Kepple Ventures, Jason Gardner, and existing investors COTU, RZM Investment, and Tom Preston-Werner.
- Qumis, a Chicago-based AI-powered insurance knowledge platform, raised $2.2 million in pre-seed funding. Armory Square Ventures led the round and was joined by MTech Capital, Grand Ventures, Alumni Ventures, BrokerTech Ventures, and others.
Care:
- Retro Biosciences, an SF-based biotech aiming to increase human lifespan, is raising a $1b Series A with participation from Sam Altman.
- Neko Health, a Stockholm-based medical body scanning technology developer, raised $260 million in Series B funding. Lightspeed Venture Partners led the round and was joined by General Catalyst, O.G. Venture Partners, Rosello, and others.
- Sunfish, a Santa Monica, Calif.-based fertility financing provider, raised $10m in Series A funding led by Haymaker Ventures
- Lindus Health, a New York City-based clinical trial optimization company, raised $55 million in Series B funding. Balderton Capital led the round and was joined by Visionaries Club and existing investors Creandum, Firstminute, and Seedcamp.
- Percipio Health, a Plano, Texas-based startup using smartphones to assess population health, raised $20m in Series A funding. Wave Ventures led with participation from UPMC Enterprises, Labcorp and First Trust Capital Partners.
Enterprise/Consumer:
- Databricks, the SF-based data intelligence company, completed its $10b Series J raise valuing it at $62b. It had previously raised $8.6b for the round as of December. Meta joined the round.
- Instabase, a San Francisco-based unstructured data management AI-powered platform, raised $100 million in Series D funding. QIA led the round and was joined by existing investors Greylock Partners, NEA, Andreessen Horowitz, and Index Ventures.
- Netradyne, a San Diego-based AI-powered fleet safety platform, raised $90 million in Series D funding. Point72 Private Investments led the round and was joined by Qualcomm Ventures and Pavilion Capital.
- StackBlitz, a San Francisco-based developer tool maker, raised $83.5 million in Series B funding. Emergence Capital and GV led the round and were joined by Madrona Venture Group, Mantis VC, and Conviction.
- Render, a San Francisco-based cloud for application developers, raised $80 million in Series C funding. Georgian led the round and was joined by 01A, avra, and existing investors Addition, Bessemer Venture Partners, General Catalyst, and the South Park Commons Fund.
- ShopMy, a New York-based digital shop maker for creators, raised $77.5m in Series B funding led by Bessemer Venture Partners and Bain Capital Ventures, with participation from Menlo Ventures, Inspired Capital and AlleyCorp.
- Clay, a New York City-based AI-filtered data provider for go-to-market teams, raised $40 million in pre-emptive Series B expansion funding. Meritech Capital led the round and was joined by Sequoia Capital, First Round Capital, Box Group, and Boldstart Ventures.
- Music AI, a Salt Lake City-based AI-powered music and audio technology developer, raised $40 million in Series A funding. Connect Ventures and monashees led the round and were joined by Kickstart, Samsung Next, Toba Capital, and others.
- Baya Systems, a Santa Clara, Calif.-based semiconductor systems technology developer, raised $36 million in Series B funding. Maverick Silicon led the round and was joined by Synopsys and existing investors Matrix Partners and Intel Capital.
- Mitiga, a New York City-based Cloud and SaaS threat detection, investigation, and response solutions provider, raised $30 million in Series B funding. SYN Ventures led the round and was joined by existing investors including ClearSky, Atlantic Bridge, Flint Capital, and others.
- Leap, a New York City-based physical retail platform, raised $20 million in funding. Tribeca Venture Partners and DNX Ventures led the round and were joined by existing investors.
- LeapXpert, a New York City-based communications platform for employees and clients, raised $20 million in Series B funding. Portage led the round and was joined by existing investors Rockefeller Asset Management, Uncorrelated Ventures, and the Partnership Fund for New York City.
- Men in Blazers Media Network, a New York City-based soccer media company, raised $15 million in Series A funding. Avenue Sports Fund led the round and was joined by Bolt Ventures, RR McReynolds, The Chernin Group, and others.
- Package.ai, a Tel Aviv-based AI-powered customer engagement platform for big-box retailers, raised $14 million in Series A funding from Susquehanna Growth Equity.
- Coram AI, a Sunnyvale, Calif.-based AI-powered video security software, raised $13.8 million in Series A funding. Battery Ventures led the round and was joined by existing investors 8VC and Mosaic Ventures.
- Belfry Software, a New York City-based platform for security providers, raised $12 million in Series A funding. Base10 Partners led the round and was joined by existing investors Bienville Capital and Aglaé Ventures.
- StormHarvester, a Belfast, Northern Ireland-based AI-powered analytics and management platform for wastewater utilities, raised £8.4 million ($10.4 million) in Series A funding. YFM Equity Partners led the round and was joined by Emerald Technology Ventures.
- Merit Systems, a Brooklyn-based attribution provider for open-source software development, raised $10 million in seed funding. A16z crypto and Blockchain Capital led the round and were joined by angel investors.
- Grepr, a San Francisco-based observability technology developer, raised $9 million in seed funding. A16z led the round and was joined by boldstart, E14 Fund, Prime Set, and D'Arcy Coolican.
- Passbolt, a Luxembourg-based password and access management platform, raised $8 million in Series A funding. Airbridge Equity Partners led the round and was joined by existing investors Expon Capital, ScaleFund, Seeder, and others.
- nexos.ai, a Vilnius, Lithuania-based AI models management platform, raised $8 million in funding. Index Ventures led the round and was joined by Creandum and Dig Ventures.
- Teal, a Miami-based job search platform, raised $7.5m in Series A funding. CityLight Capital and Flybridge led with participation from Rethink Capital Partners and Lerer Hippeau.
- Doti AI, a Tel Aviv-based internal knowledge enterprise AI platform, raised $7 million in seed funding. F2 Venture Capital led the round and was joined by angel investors.
- Spikerz, a Tel Aviv-based social media security provider, raised $7 million in funding. Disruptive AI led the round and was joined by Horizon Capital, Wix Ventures, Storytime Capital, and BDMI.
- Mobly, a Lehi, Utah-based event marketing technology developer, raised $4.3 million in seed funding. Jump Capital and Eniac Ventures led the round and was joined by existing investors Peterson Ventures, Tenzing.VC, Peak Ventures, and angel investors.
- Coval, a San Francisco-based AI agent evaluation platform, raised $3.3 million in seed funding. MaC Venture Capital led the round and was joined by General Catalyst and Y Combinator.
- Intryc, a San Francisco-based AI-automated customer support quality assurance platform, raised $3.1 million in seed funding from General Catalyst, scouts from Sequoia, and existing investors Episode 1 and 500 Emerging Europe.
- Pipeshift, a San Francisco-based cross-infrastructure AI workload orchestration platform, raised $2.5 million in seed funding. Y Combinator and SenseAI Ventures led the round and were joined by Arka Venture Labs, Good News Ventures, Nivesha Ventures, angel investors, and others.
- Beanstack, an Arlington, Va.-based reading challenges company for libraries and schools, raised $1.5 million in funding. Riverside Acceleration Capital and Evoce Capital led the round and were joined by Mark Cuban, Kapor Capital, Militello Capital, and others.
- Favorited, a Los Angeles-based live-streaming platform, raised $1.3 million in pre-seed funding from a16z Speedrun, Soma Capital, HF0, and angel investors.
HardTech:
- Sereact, a Stuttgart, Germany-based robotics embodied AI developer, raised €25 million ($26 million) in Series A funding. Creandum led the round and was joined by existing investors Point Nine and Air Street Capital and angel investors.
- ecoplanet, a Munich-based energy management software provider, raised €16 million ($16.7 million) in Series A funding. EQT Ventures led the round and was joined by existing investor HV Capital and others.
- Kraaft, a Paris-based messaging, document management, reporting, and workflow app for the construction industry, raised €13 million ($13.5 million) in Series A funding. Dawn Capital led the round and was joined by Brick & Mortar Ventures, Chalfen Ventures, Stride VC, and OSS Ventures.
- Spaceium, an SF-based space refueling startup, raised $6.3m in seed funding led by Initialized Capital
- Kaya AI, a Columbus-based advanced construction supply chain intelligence platform, raised $5.3 million in pre-seed funding. 53 Stations, Suffolk Technologies, and Soma Capital led the round and were joined by Zeal Capital Partners, RXR, Mantis VC, Virta Ventures, and others.
- BPR Hub, a San Francisco and Bangalore, India-based compliance management platform for manufacturing companies, raised $2.6 million in seed funding. Accel and Kae Capital led the round and were joined by angel investors.
Sustainability:
- Gravity, a San Francisco-based carbon accounting platform for energy management, raised $13 million in Series A funding. Ansa Capital led the round and was joined by Communitas Capital, Buoyant Ventures, WEX Venture Capital, and existing investors Eclipse, Hanover, and Caffeinated Capital.
- Bedrock Energy, an Austin-based geothermal heating and cooling company, raised $12 million in Series A funding. Titanium Ventures led the round and was joined by Energy Impact Partners, Sustainable Future Ventures, and existing investors Wireframe Ventures, Overture Ventures, Toba Capital, and others.
- Bolt.Earth, a Bangalore, India-based electric vehicle charging solutions provider, raised $5 million in Series A+ funding. Version One Ventures led the round and was joined by existing investors Union Square Ventures and Prime Venture Partners.
- CapeZero, a Brooklyn-based financial platform for clean energy developers, raised $2.6 million in seed funding. Powerhouse Ventures led the round and was joined by Climactic, Avesta Fund, Virta Ventures, and Stepchange.
Acquisitions & PE:
- Metropolis acquired Oosto, a NYC-based computer vision company formerly known as AnyVision, for $125m in stock, per TechCrunch. Oosto previously raised $380m from investors including SoftBank, DFJ Growth, and Elysian Park Ventures.
- 23andMe, a Sunnyvale, Calif., consumer genomics company, is weighing a sale of its SF telehealth unit Lemonaid Health, which it bought for $400m in 2021.
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