Sourcery → YC W24, SBF, WeBack ?

(3/25-3/28) CoreWeave, Observe, Hume AI, FundGuard, Picogrid, Fieldguide, NewRetirement, Pelago, Nourish, Profluent, Cyera, Coro, Skyflow, Fireworks AI, Celestial AI; Canva/Affinity, Benihana..

Happy YC W24 Week

To kick things off, this YC AI list is giving Silicon Valley hope

Feeling uninspired? That there’s too much ‘tech’ out there? No moat? No ‘new’ ideas anymore? That the only alpha left in VC is semiconductors, hardtech, and robots?

Well, don’t click on that image if you don’t want some hope. This YC list is stealing the show by creating their own AI models and rebuilding the technology stack more efficiently before incumbents can get to it.. which, as we know, takes some time.. and a lot of internal politics/regulations. Technical founders and those that have been quick to learn AI, LLMs, and the opportunities in infrastructure have had a significant advantage in starting companies, being ripe for competitive partnerships, or joining the army being recruited by OpenAI, Meta, and Google. 

The fabric of technology is changing, and someone’s got to build it. Adopt, adapt, or get left behind.

Check out the full W24 batch list here or a curated AI list here

Musings

Sourcery Podcast with Morgan Housel drops Friday! This is a juicy one..

AI

• Meta Pursues AI Talent With Quick Offers, Emails From Zuckerberg [The Information]

• Regulators are forcing big tech to rethink its AI strategy. Startup acquisitions have been replaced by hiring sprees and tight partnerships [The Economist]

• Microsoft and OpenAI Plot $100 Billion Stargate AI Supercomputer [The Information]

• Scale AI Nears $13 Billion Valuation in Accel-Led Round [The Information]

• OpenAI Removes Altman as Owner of Startup Fund [The Information]

• Contrary shares an awesome list of AI funding rounds to track [Contrary]

AI is being touted high and low as the latest platform shift in technology. The results have been fascinating, and the progress has happened with break-neck speed. Venture funding in AI has grown 20x over the last decade. Y Combinator’s latest batch of 242 companies had 71% building in AI. 17% of Russell 3000 companies mentioned AI in their earnings calls.

In a blog post, Jeff Burke from Replit breaks down the massive capital (~$158B) moves in AI → Here

HardTech

• US Manufacturing Activity at Fastest Rate Since 2022 [Yahoo Finance]

  • Data → Manufacturing PMI® at 50.3%, March 2024 Manufacturing ISM® Report On Business

• Chris Power of Hadrian shares the dynamics behind their latest $117M Series B financing, state of hardtech, and growth strategy to revitalize American manufacturing [Sourcery]

Yikes

• How Sam Bankman-Fried’s sentence stacks up against the century’s biggest fraudsters [Vox]

  • SBF vs. Bernie Madoff, Elizabeth Holmes, Allen Stanford, and Jeffrey Skilling

• Adam Neumann and Partners Offer More Than $500 Million for WeWork [Bloomberg]

• Why McKinsey is paying staff to leave [The Times]

• Chaotic departure of StabilityAI chief raises doubts over start-up’s future.

  Emad Mostaque’s resignation from group valued at $1B came after legal skirmishes and battles with investors [FT]

• NYC’s tech talent is taking off.. and taking over SF so far this year [Jason Saltzman, Live Data Technologies]

PS

→ We’re hiring Content & Marketing interns! If you’re interested in helping grow Sourcery, apply here!

. . .

Last Week (3/25-3/28):

Relevant deals include the 60+ deals across stages below. 

I've categorized the deals below into five categories, FinTech, Care, Enterprise & Consumer, HardTech, and Sustainability, and ordered from later-stage rounds to early-stage rounds. 

Highlighted deals include: CoreWeave, Observe, Hume AI, FundGuard, Picogrid, Fieldguide, NewRetirement, Pelago, Nourish, Profluent, Cyera, Coro, Blueground, Skyflow, Fireworks AI, Celestial AI; Canva/Affinity, Benihana

Final numbers on Bank Market Share Post-2023 Collapse at the bottom.

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Deals 

Fintech:

- FundGuard, New York City, Boston., & Tel Aviv, AI-powered platform designed to help asset managers and their service providers manage mutual funds, ETFs, and more, raised $100M in Series C funding led by Key1 Capital with participation from Euclidean Capital, Hamilton Lane, Blumberg Capital, and Team8. 

- 0G Labs, a web3 infrastructure startup, raised $35M in pre-seed funding led by Hack VC with participation from Alliance, Animoca Brands, Delphi Digital, Stanford Builders Fund, Symbolic Capital, and OKX Ventures. 

- Fieldguide, San Francisco, CA AI platform for advisory and audit services, raised $30M in Series B funding led by Bessemer Venture Partners with participation from 8VC.

- Espresso Systems, a Menlo Park, Calif.-based "shared sequencing" blockchain startup, raised $28M in Series B funding led by Andreessen Horowitz with participation from Polygon Labs, StarkWare, Taiko, and Offchain Labs. 

- NewRetirement, a comprehensive, digital-first financial planning platform for consumers and enterprise partners. The company announced that it has raised $20M in Series A funding led by Allegis Capital and joined by Ulu Ventures, Nationwide Ventures, Fin Capital, Frontier Venture Capital, Cameron Ventures, Marin Sonoma Impact Ventures, Northwestern Mutual Future Ventures, Plug and Play Ventures, and Motley Fool Ventures.

- ZayZoon, Scottsdale, AZ payroll platform for businesses that allows employees to access their wages on-demand, raised $15M in a Series B extension led by Viola Fintech and Inuit Ventures with participation from Framework Venture Partners and Export Development Canada.

- Nominal, New York, NY developer of AI technology designed to modernize and automate enterprise accounting and financial management systems, raised $9.2M in seed funding led by Bling Capital and Hyperwise Ventures with participation from Vela Partners and Incubate Fund.  

- Rails, Toronto, Canada crypto exchange, raised $6.2M in seed funding from Slow Ventures, Round13 Capital, CMCC Global, and Quantstamp.

- OrdinalsBot, London API-first company within the Ordinals space building out the data layer of the BTC blockchain, announced a $3M+ seed funding round led by DACM, with participation from Eden Block, Nural, Kenetic Capital, Lightning Ventures, and others. This funding comes as a fast follow to OrdinalsBot’s pre-seed round, which was raised less than five months ago, bringing the team’s total funding to over $4.5M

. . .

Care:

- Pelago, New York, NY digital clinic partner to U.S. businesses and health plans for substance use management, raised $58M in Series C funding led by Atomico with participation from Kinnevik AB, Octopus Ventures, Y Combinator, and new investors Eight Roads and GreyMatter Capital.  

- Nourish, New York, NY telenutrition startup, raised $35M in Series A funding led by Index Ventures with participation from Maverick Ventures, TCV, YC, Thrive Capital, and BoxGroup. 

- Profluent, Berkeley, CA developer of AI models and data sets designed for biomedicine applications, raised $35M in funding led by Spark Capital with participation from Insight Partners and Air Street Capital and angel investors. 

- Tennr, New York, NY platform designed to automate referral processing, payment posting, claims auditing, medical record management, and more for the health care industry, raised $18M in Series A funding led by a16z with participation from Foundation Capital and The New Normal Fund.

- Float, San Francisco, CA platform that connects chronically ill patients with nurses that can provide specialty treatments usually only offered at a hospital, raised $10M in Series A funding led by Canvas Ventures with participation from Wave Capital, Y Combinator, Burst Capital, Also Capital, and angel investors.

- Chiyo, Detroit, MI food platform that designs specific nutrition programs for pregnant women and new moms based on their stage and symptoms, raised $3M in funding from Bread & Butter Ventures, Ingeborg, The Helm, Peterson Ventures, Detroit Venture Partners, Union Heritage Ventures, and Palette Ventures.

- Goodbill, Seattle, WA startup focused on reducing errors in hospital bills, raised $2M from Founders' Co-op, Maveron, and Liquid 2 Ventures. 

. . . 

Enterprise & Consumer: 

- Cyera, an Israeli cloud data security startup, is raising nearly $300M in Series C funding at a $1.5B valuation led by Coatue. 

- Observe, a SaaS observability startup focused on machine-generated data, raised $125M in Series B funding led by Sutter Hill Ventures with participation from Snowflake, Nat Friedman & Daniel Gross, and insiders Capital One Ventures and Madrona. 

- The BrandTech Group, New York, NY digital-only generative AI marketing company, raised $115M in Series C funding from Fimalac, NendoLabs, Mousse Partners, and Bansk Group. 

- Coro, a New York City-based cybersecurity platform for small and medium-sized enterprises, raised $100M in Series D funding led by One Peak with participation from Energy Impact Partners and Balderton Capital.

- Hume AI, New York, NY startup and research lab, raised $50M in Series B funding led by EQT Ventures with participation from Union Square Ventures, Northwell Holdings, LG Technology Ventures, and others. 

- Blueground, New York, NY network of furnished rental properties designed for stays longer than 30 days, raised $45M in Series D funding from Susquehanna Private Equity Investments, WestCap, and others. 

- Succinct, San Francisco developer of zero-knowledge proof tools, raised $43M led by Paradigm with participation from Robot Ventures and Standard Crypto. 

- Zilliant, Austin, TX pricing lifecycle management platform, raised $35M in funding from existing investor Madison Dearborn Partners. 

- Skyflow, Palo Alto, CA provider of data privacy vaults designed to protect sensitive enterprise data and keep it out of Large Language Models, raised $30M in Series B funding led by Khosla Ventures with participation from Foundation Capital, Mouro Capital, and Canvas Ventures. 

- Fireworks AI, Redwood City, CA platform designed to help developers build new AI solutions, raised $25M in Series A funding led by Benchmark with participation from Sequoia Capital and angel investors. 

- Vizcom, San Francisco, CA developer of AI tools for designers to create photorealistic renderings of what they’re designing, raised $20M in Series A funding led by Index Ventures.

- Permiso, Palo Alto, CA cloud threat detection and response platform, raised $18.5M in Series A funding led by Altimeter Capital with participation from Point72 Ventures. www.permiso.io

- Champ Titles, Cleveland, OH provider of digital vehicle title and registration services, raised $18M in Series C funding led by Point72 Ventures with participation from W.R. Berkley Corporation, Eos Venture Partners, Guidewire Software, and Rev1 Ventures. 

- Confetti, a team-building platform, raised $16M in Series A funding co-led by Entrée Capital and IN Venture. 

- Oriole Networks, London, UK developer of technology designed to train large language models faster while consuming less power, raised £10M ($12.6M) in seed funding led by UCL Technology Fund, Clean Growth Fund, XTX Ventures, and Dorilton Ventures with participation from Innovate UK Investor Partnership. 

- Bedrock Security, San Francisco, CA data security platform designed to automatically identify and protect enterprise’s most essential data, raised $10M in seed funding from Greylock. 

- Abstract Security, San Francisco, CA security analytics platform, emerged from stealth with an $8.5M seed funding round led by Crosslink Capital, Rally Ventures, and Liquid 2 Ventures. 

- Sprocket Security, Madison, WI cybersecurity platform, raised $8M in Series A funding led by Blueprint Equity with participation from Capital Midwest Fund.

- Foundational, San Francisco, CA AI-powered data management platform, raised $8M in seed funding led by Viola Ventures and Gradient with participation from Asymmetric Venture Partners and angel investors. 

- Cloverleaf, Cincinnati, OH coaching platform designed to automatically send tips to employees for ways to improve their performance, raised $7.3M in a Series A extension led by Advantage Capital with participation from Conductive Ventures, Origin Ventures, ScOp Venture Capital, JobsOhio, Cintrifuse Capital, and 1809 Capital.

- Metaview, London, UK AI assistant designed for the hiring process, raised $7M in funding led by Plural with participation from Coelius Capital, Vertex Ventures US, Seedcamp, Village Global, and others.

- OpenPipe, Seattle, Wash.-based tool that lets developers create their own application-specific large language models, raised $6.7M in seed funding led by Costanoa Ventures with participation from Y Combinator. 

- Tarsal, New York, NY security data platform, raised $6M in seed funding led by Harpoon Ventures and Mango Capital with participation from Y Combinator, Abstract Ventures, and Backend Capital.

- OneNotary, San Francisco, CA online, on-demand notarization provider, raised $5M in Series A funding led by Jackson Square Ventures with participation from DocuSign Founder Tom Gonser, DocuSign Ventures, GoodPaper Ventures, Digital Future, and TheLegalTechFund. 

- RealSage, Toronto, Canada AI-powered data insight platform for real estate managers, raised $4M in seed funding led by York IE with participation from Karman Ventures, StellifiVC, Golden Section, Second Century Ventures, and angel investors. 

. . .

HardTech:

- CoreWeave, Roseland, NJ cloud computing platform, is in talks to raise funding at a $16B valuation, per Bloomberg. This would more than double its $7B valuation last year in a Fidelity-led round, and would include both primary and secondary shares. https://axios.link/3TukXDV

- Celestial AI, Santa Clara, CA creator of the Photonic Fabric optical interconnect technology platform, raised $175M in Series C funding led by U.S. Innovative Technology Fund with participation from AMD Ventures, Koch Disruptive Technologies (KDT), Temasek, and others. 

- PipeDreams, San Francisco, CA acquirer of and investor in local HVAC and plumbing businesses, raised $25.5 million in Series A funding led by Canvas Ventures and Plural. 

- Gather AI, a provider of drone-powered warehouse inventory monitoring, raised $17M in Series A extension funding led by Bain Capital Ventures with participation from Tribeca Venture Partners, Dundee VC, Expa and Bling Capital. 

- TurbineOne, San Francisco, CA developer of AI software designed for military intelligence, raised $15M in Series A funding led by Bessemer Venture Partners with participation from The General Partnership, XYZ Ventures, and Pallas Ventures. 

- Picogrid, El Segundo, CA platform designed to connect the control of remotely-controlled, sensors, drones, command interfaces, and other defense systems on one network, raised $12M in seed funding led by Initialized Capital with participation from Starburst Ventures, Credo Ventures, Giant Step Capital, Domino Ventures, and Alumni Ventures.

. . .

Sustainability:

- EVOLOH, Santa Clara, CA manufacturer of electrolyzer stacks designed to make green hydrogen production cheaper, raised $20M in Series A funding led by Engine Ventures with participation from NextEra Energy Resources and 3M Ventures.

- AirMyne, Berkeley, CA direct air capture startup, raised $6.9M in seed funding from YC, Alumni Ventures, Liquid 2 Ventures, EMLES, Impact Science Ventures, Another Brain, Soma Capital, and Wayfinder. 

- Ionobell, San Francisco, CA developer of silicon battery production technology, raised $3.9M in a seed extension from Dynamo Ventures and Trucks VC.

- Orchard Robotics, a Seattle, Wash.-based based provider of robotic and AI precision crop management technology, raised $3.8M across pre-seed and seed funds led by General Catalyst with participation from Humba Ventures, Soma Capital, Correlation Ventures, VU Venture Partners, Contrary, and Genius Ventures.

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Acquisitions & PE: 

- Adam Neumann and his VC-backed real estate tech firm Flow confirmed that they've offered to buy WeWork out of bankruptcy for more than $500m, without identifying their financing partners.

- Canva, the Australian design software company valued by VCs at $40B, acquired Affinity, a provider of professional photo editing and illustration software. 

- H.I.G. Capital agreed to acquire the professional services and payroll & HCM Outsourcing business of Alight (NYSE: ALIT), a Lincolnshire, IL provider of health, wealth, and wellbeing services for employees, for up to $1.2B.

- Perforce Software, backed by Francisco Partners and Clearlake Capital Group, agreed to acquire Delphix, a Redwood City, CA provider of data management software designed to automate data security. Financial terms were not disclosed. 

- The ONE Group Hospitality (Nasdaq: STKS) agreed to acquire Safflower Holdings, the parent company of Benihana, an Aventura, FL restaurant chain, for $365M. 

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Final Numbers

Source: Kruze Consulting

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