Venture Capital

⚡ ServiceTitan’s IPO is a big winner that could inspire fintechs

ServiceTitan, a provider of financial and customer management software for the trades, made a strong debut on the stock market, with its shares rising from an IPO price of $71 to over $100 shortly after trading began. However, its decision to go public was driven more by the need to pay off venture investors than by favorable market conditions. ServiceTitan had agreed to increasing penalties for delaying its IPO, requiring it to raise funds quickly to avoid these penalties.

The company also allocated about $311 million of the IPO proceeds for buying back nonconvertible preferred stock and paying dividends to investors. Although the IPO price may not have fully shielded it from penalties, it still allowed ServiceTitan to raise approximately $625 million, which is crucial for its operations, as it remains unprofitable.

The positive response from retail investors could indicate a renewed interest in tech IPOs, particularly benefiting fintech companies looking to go public. Analysts suggest that ServiceTitan's successful debut could encourage other fintech firms in the IPO pipeline to follow suit.

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🚨 Nearly half of US teens are online almost constantly, Pew study finds

A new Pew Research Center study reveals that nearly half of U.S. teens are online almost constantly, with YouTube being the most popular platform. About 46% of teens report being online regularly, and 90% use YouTube, with 73% accessing it daily. Other popular platforms include TikTok and Instagram, used by 60% of teens, while 55% use Snapchat.

The study highlights a significant decline in Facebook usage among teens, dropping from 71% a decade ago to just 32% today. Similarly, the use of X (formerly Twitter) has decreased, with only 17% of teens reporting usage, down from 33% ten years ago and 23% in 2022.

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✨ Microsoft debuts Phi-4, a new generative AI model, in research preview

Microsoft has introduced Phi-4, the latest model in its Phi family of generative AI, claiming improvements particularly in math problem solving due to enhanced training data quality. Currently, Phi-4 is available in limited access on the Azure AI Foundry platform for research purposes only. This model features 14 billion parameters, competing with other small models like GPT-4o mini and Gemini 2.0 Flash.

The performance boost is attributed to the use of high-quality synthetic datasets and human-generated content, along with unspecified post-training enhancements. Many AI labs are exploring innovations in synthetic data and post-training techniques. Phi-4 is notable as the first model launched after the departure of Sébastien Bubeck, a key figure in its development, who left Microsoft for OpenAI in October.

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🔹 SolarSquare raises $40 million in India’s largest solar venture round

SolarSquare has raised $40 million in a funding round led by Lightspeed, marking the largest venture investment in India's solar sector. Based in Mumbai, SolarSquare transitioned from corporate sales to residential solar in 2021 and now powers over 20,000 homes, becoming India’s largest operator of distributed solar assets. Co-founder Shreya Mishra emphasizes the alignment of profit and purpose in this rapidly growing industry.

The company differentiates itself by guaranteeing returns on solar investments, promising compensation if energy outputs fall short. With average installation costs around $1,500, SolarSquare aims to make solar energy accessible and attractive. Government incentives have fueled interest in solar, as only 1% of Indian homes currently adopt it compared to higher rates in countries like Australia.

India has ambitious renewable energy targets, aiming for 500 gigawatts by 2030, with solar expected to contribute 280 gigawatts. The government supports this transition with various incentives, including tax benefits and subsidies, while SolarSquare aids customers in navigating these opportunities.

With the new funding, SolarSquare plans to expand its operations from 20 to 50 cities, partnering with local entities to maintain quality. The investment reflects Lightspeed's growing commitment to the Indian market, where it has invested in multiple startups.

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🚨 Microsoft will take an $800M hit over Cruise robotaxi shutdown

GM's decision to shut down its Cruise robotaxi program has significant repercussions for its minority investors, notably Microsoft, which will incur an $800 million impairment charge. This charge will negatively impact Microsoft's second-quarter earnings by approximately $0.09 per share. GM, which owns about 90% of Cruise, plans to buy back shares from other investors to increase its stake.

The company had previously raised substantial capital, including $2 billion in a 2021 funding round that valued Cruise at $30 billion, with contributions from Microsoft, Walmart, and Honda. GM will now integrate Cruise into its own efforts to develop driver assistance and autonomous vehicle technologies. Additionally, Honda has announced it will cease funding a joint venture with GM and Cruise for a robotaxi service in Japan.

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🚨 OpenAI-backed Speak raises $78M at $1B valuation to help users learn languages by talking out loud

Speak has developed a language learning platform that mimics how native speakers acquire languages, emphasizing listening and speaking over traditional reading and writing methods. The startup recently raised $78 million in a Series C funding round, increasing its valuation to $1 billion. The round was led by Accel, with participation from notable investors like OpenAI, Khosla Ventures, and Y Combinator.

The funding will help expand the number of languages offered, starting with Spanish and French, while continuing to support English learners. Speak's approach focuses on practical communication skills, utilizing AI to generate audio conversations and facilitate user practice without human involvement. The app has been downloaded over 10 million times, with users averaging 10-20 minutes of usage daily, and it operates on a subscription model.

Speak's learning process involves three steps: immersion in listening and speaking, repetitive practice of new phrases, and contextual application of language using AI. The company aims to avoid traditional test preparation, prioritizing real-world communication skills. While it currently lacks integrations with standardized language assessments, plans for a fluency scoring system are in development.

Gamification is not yet part of Speak's strategy, but future updates may include features that encourage engagement without sacrificing educational effectiveness. The successful funding round and strategic investments highlight Speak's potential in the consumer AI and language learning markets.

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🔹 Google says its new quantum chip indicates that multiple universes exist

On Monday, Google unveiled Willow, its latest quantum computing chip, boasting impressive speed and reliability. However, the tech industry's attention was particularly drawn to a bold claim made by Hartmut Neven, founder of Google Quantum AI, suggesting that Willow's extraordinary performance implies the existence of parallel universes, supporting the notion of a multiverse.

Neven highlighted that Willow could perform computations in under five minutes that would take traditional supercomputers 10 septillion years, a figure that vastly exceeds known timescales in physics. While some welcomed this idea as plausible, skeptics noted that the performance metrics were based on benchmarks created by Google itself, raising questions about the validity of these claims.

Quantum computers operate using qubits, which can represent multiple states simultaneously, allowing them to solve complex problems beyond the reach of classical computers. However, the challenge remains that as more qubits are used, the likelihood of errors increases. Google's goal with Willow was to minimize these errors, which Neven asserts has been achieved.

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🔵 Joby launches $300M public offering ahead of 2025 commercial eVTOL release

Joby Aviation, a startup focused on electric vertical takeoff and landing vehicles, has initiated a public offering to sell up to $300 million in common stock, following a previous $222 million raise in October. This could bring Joby's total funding to $522 million as it prepares for a commercial launch in 2025.

The funds will support certification, manufacturing, and general working capital as Joby aims to introduce air taxis in major cities like New York, Los Angeles, Dubai, and Abu Dhabi, in partnership with Delta Air Lines and Uber. The company also holds a $131 million contract with the Department of Defense.

Before launching, Joby must complete a type certification process to ensure its aircraft meet safety standards. This public offering coincides with the Federal Aviation Administration's recent approval for eVTOLs to operate alongside traditional aircraft, as well as a $500 million investment from existing investor Toyota. To date, Joby has raised a total of $2.6 billion.

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🔻 Dimension raises $500M second fund for investing at the intersection of tech and life sciences

Raising capital in 2024 has been challenging for many venture capital firms, but Dimension Capital has experienced significant success with its second fund. Within just two years of launching, Dimension raised an oversubscribed $500 million fund, surpassing its $400 million target. Founders Zavian Dar, Adam Goulburn, and Nan Li credit their appeal to a unique focus on investing at the intersection of life sciences and technology, particularly in AI-driven drug discovery.

Since its inception in 2022, Dimension has invested in around 20 companies, half of which remain in stealth mode. Notable portfolio companies include Chai Discovery, which is developing an open-source AI model for drug discovery, and Enveda Biosciences, which raised $130 million for its AI-based medicine development.

Originally focused on early-stage investments, Dimension has shifted to a stage-agnostic approach, allowing it to invest anywhere from $1 million to over $30 million across various development stages, including publicly traded companies. The firm prioritizes biotech startups with teams that include significant computational expertise, ensuring a collaborative environment between biologists and tech specialists.

Dimension's investor base comprises endowments, hospitals, and research institutions, and the firm is impressed by the caliber of entrepreneurs entering the life sciences sector, highlighting the ambition and technical expertise of the new founders.

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🚨 YC-backed Zimi raises $2M to help international merchants easily sell in the U.S.

Audrey Djiya and Peter Nsaka, both with entrepreneurial backgrounds, co-founded Zimi to simplify cross-border commerce for international merchants. Djiya, inspired by her family's business history, and Nsaka, who noticed a lack of representation for Africa in e-commerce data while at Shopify, aimed to address the challenges faced by brands shipping internationally, such as high costs and long delivery times.

Launched earlier this year, Zimi recently secured a $2 million seed round led by Fearless Fund, with participation from Y Combinator and others. The company focuses on providing localized fulfillment centers for merchants selling into the U.S., helping them navigate tax regulations, currency exchange, and compliance.

Zimi differentiates itself by offering a holistic platform for merchants to manage all aspects of international sales in one place. The founders initially attracted customers through direct outreach on social media and LinkedIn, sharing their journey and insights.

The seed funding will be used to expand Zimi's U.S. fulfillment network, develop AI models for improved merchant experiences, and launch a payment solution to facilitate dollar transactions for international merchants. Zimi is seeing strong interest from brands worldwide looking to access U.S. markets and plans to grow its infrastructure and team to support this demand.

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🚨 Lead Edge is increasingly steering its 700+ investors away from VC deals

Mitchell Green, founder and manager of Lead Edge Capital, has successfully attracted over $5 billion from more than 700 investors by shifting his strategy towards "control deals"—investments in companies that venture capitalists often overlook. His firm has seen success with investments in notable companies like Alibaba and ByteDance, while also focusing on businesses outside traditional tech hubs, such as a cardiac-monitoring software firm in Florida.

Green emphasizes a disciplined approach to sourcing investments, with his team of analysts evaluating around 10,000 companies annually based on specific criteria. He maintains that Lead Edge does not prioritize ownership percentages; instead, their goal is to drive revenue growth regardless of whether they hold a minority or majority stake in a business.

Despite the challenges in the current venture market, characterized by excessive capital chasing overvalued companies, Green has avoided high-risk, first-generation AI startups, predicting that many will fail due to unsustainable costs. He critiques the venture ecosystem for fostering inflated valuations and emphasizes the need for a return to more grounded investment strategies.

Looking ahead, Green believes in the potential of companies like ByteDance, even under uncertain political conditions regarding TikTok in the U.S. He remains cautious about the broader venture landscape, noting the competitive advantages of established firms and the saturation of capital in the market.

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🚨 Apple sued over abandoning CSAM detection for iCloud

Apple is facing a lawsuit for not implementing a system to scan iCloud photos for child sexual abuse material (CSAM). The lawsuit claims that Apple's failure to take action forces victims to relive their trauma, despite the company previously announcing plans to enhance child protection measures. In 2021, Apple proposed using digital signatures from the National Center for Missing and Exploited Children to detect known CSAM in iCloud, but abandoned the initiative amid concerns from privacy advocates about potential government surveillance.

The lawsuit is brought by a 27-year-old woman who, under a pseudonym, recounts being molested as an infant and continues to receive law enforcement notifications about charges related to images of her. Attorney James Marsh indicated that there could be a group of 2,680 victims eligible for compensation. Apple stated that it is actively working on solutions to combat these crimes while maintaining user security and privacy. This lawsuit follows another case from August, where a 9-year-old girl and her guardian accused Apple of failing to address CSAM on iCloud.

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⚙️ Elon Musk’s X gains a new image generator, Aurora

X, the social network formerly known as Twitter and owned by Elon Musk, has introduced a new image generator called Aurora to its Grok assistant. However, after a brief period of availability on Saturday, the feature disappeared for some users. Like its predecessor, Aurora has minimal restrictions, allowing the generation of images featuring public and copyrighted figures, including graphic content, although it avoids nudity.

Aurora can be accessed via the Grok tab on X's mobile apps and website. While xAI staff announced its launch, details about its development remain unclear—it's uncertain if xAI created Aurora independently, built on an existing generator, or collaborated with a third party. Some xAI employees contributed to fine-tuning Aurora, which is noted for its photorealistic capabilities but can produce flawed outputs, such as awkwardly blended objects or missing fingers.

The release of Aurora follows X's decision to make Grok free for all users, allowing them to send limited messages and generate images daily. Additionally, xAI recently closed a $6 billion funding round and is reportedly developing a standalone app for Grok, with plans for a new version, Grok 3, on the horizon.

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🔺 Google pushes back against federal supervision of its payment arm

The Consumer Financial Protection Bureau (CFPB) announced that it would place Google’s payment division under federal supervision, prompting Google to file a lawsuit to block this action. The supervision would subject Google to inspections similar to those conducted on major banks for potential legal violations. The CFPB recently finalized regulations extending its oversight to payment and digital wallet services, citing consumer complaints about Google’s handling of "allegedly erroneous transactions" and insufficient fraud prevention measures.

Google's lawsuit contends that the CFPB's concerns are based on a limited number of unsubstantiated complaints regarding Google Pay, which was discontinued as a standalone app in the U.S. earlier this year. A Google spokesperson described the CFPB's actions as government overreach, asserting that the peer-to-peer payment service posed no risks. Additionally, there is speculation that the CFPB's decision could be reversed under a future Trump administration, which is set to take office in January.

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😄 a16z-backed Toka wants to help US agencies hack into security cameras and other IoT devices

U.S. government agencies often conduct legal hacking, such as the FBI wiretapping or the NSA monitoring emails. Recently, there’s been increased interest in hacking Internet of Things (IoT) devices, like security cameras. Toka, an Israeli startup backed by Andreessen Horowitz, specializes in this area and gained attention for its claims about accessing and deleting security camera footage.

Toka is currently hiring for positions aimed at expanding its business within the U.S. government, including a "Client Director USA" and a customer success engineer for federal law enforcement. The company emphasizes that it only sells to military, homeland security, intelligence, and law enforcement agencies that comply with local laws.

The trend of hacking IoT devices is becoming common in defense and intelligence, with Israel recognized for its intelligence-gathering capabilities. Toka has raised $37.5 million since its founding in 2018 and has aimed to distance itself from negative associations with Israeli spyware firms by committing to work only with governments that have good records on civil liberties and corruption.

Toka's international sales are closely monitored, and while it has attended conferences in the UAE, it claims not to have clients there. The company has a review process for its client countries, assisted by external legal and financial experts.

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🔺 Paytm sells PayPay stake to SoftBank for $279.2 million

Paytm has agreed to sell its stake in the Japanese payments firm PayPay to SoftBank for $279.2 million, part of its strategy to divest non-core assets following a difficult regulatory period earlier this year. This stake, acquired six years ago, comes after Paytm's restructuring efforts, which included selling its entertainment ticketing unit to Zomato for $246 million in August.

The sale will increase Paytm's cash reserves to $1.46 billion as it seeks to regain market share in India's competitive payments landscape, especially after regulatory restrictions in January led to a loss of customers. Since June, Paytm's shares have nearly tripled after the payments regulator allowed the company to resume customer additions to its UPI service. Paytm reported its first quarterly profit in September, largely due to asset sales.

In a statement, Paytm expressed gratitude to SoftBank and the PayPay team for their partnership in Japan, indicating a commitment to supporting PayPay's technology and product innovations moving forward. This deal also marks the conclusion of Paytm's relationship with SoftBank, which had previously divested its remaining shares in June after being an early investor through its Vision Fund.

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🫶 Fly Ventures sets its eyes on technical founders with a fresh €80M fund

Fly Ventures, a Berlin-based venture capital firm focused on seed-stage European startups in enterprise and deep tech, has launched its third fund, raising €80 million. This new fund follows a €53 million fund raised in 2020 and was reportedly oversubscribed, reflecting the firm's commitment to maintaining a boutique investment approach.

Founded by Gabriel Matuschka and Fredrik Bergenlid, Fly Ventures targets technical founders and invests between €1-4 million in initial funding rounds of €2-10 million. The firm operates with an equal-GP model among four partners located in Berlin, London, Paris, and Zurich. Matuschka noted the importance of covering key tech hubs, particularly as Paris has recently accelerated in technical advancements.

AI has represented approximately 45% of Fly's investments, with vertical applications and industrial tech accounting for 35%, and dev tools/infrastructure for 20%. The firm's portfolio includes startups like Inato, Salv, and GitGuardian, along with Wayve, which recently raised $1.05 billion for autonomous driving technology. Additionally, Fly Ventures has invested in Zurich-based Lakera and UK-based Orbital Materials, focusing on enterprise security and materials science, respectively.

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🚨 Uber and WeRide launch robotaxi service in Abu Dhabi

Uber and Chinese autonomous vehicle company WeRide have launched a commercial robotaxi service in Abu Dhabi, marking Uber's first international autonomous vehicle offering. This partnership is part of Uber's broader strategy to collaborate with various autonomous vehicle firms. Despite these initiatives, investors remain cautious about Uber's ability to compete with technology developers like Waymo and Tesla, particularly after Uber's stock fell nearly 10% following Waymo's announcement of a robotaxi service in Miami.

The initial rollout in Abu Dhabi will be limited, with specific routes between Saadiyat Island, Yas Island, and Zayed International Airport. Each vehicle will have a human safety operator initially, with plans for a fully driverless launch in 2025. Uber and WeRide will collaborate with local Tawasul Transport for fleet operations.

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🛡 Cleerly raises $106M from Insight Partners for AI heart health early detection

Heart disease is the leading cause of death in the U.S., yet many individuals who suffer heart attacks are unaware of their underlying conditions. Cleerly, a cardiovascular imaging startup founded by cardiologist James Min in 2017, aims to address this by using AI software to analyze CT scans and detect early-stage coronary artery disease, akin to cancer screenings. The company is conducting a large clinical trial to show that its screening method can identify heart conditions more accurately than traditional approaches like blood pressure and cholesterol tests.

Recently, Cleerly raised $106 million in a Series C extension round, adding to a previous $223 million raised within two years, attracting significant investor interest due to its growth potential. While the company awaits full FDA clearance for general heart screening, its algorithms are already approved for diagnosing symptomatic patients, and Medicare has approved coverage for its plaque analysis test.

Cleerly's AI-driven analysis is less invasive than traditional methods, and its software has been commercially available for four years, boasting over 100% annual growth. With recognition from health insurers and Medicare for its diagnostic method, Cleerly is well-positioned for continued growth. However, it faces competition from other companies like HeartFlow and Elucid, all aiming to screen a broader population for heart disease.

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⚡️ Time4 is a new Daphni-backed fund dedicated to French entrepreneurs with diverse backgrounds

France's startup ecosystem has expanded significantly over the past decade, fueled by public support and private investment. However, most venture-backed startups are concentrated in Paris, with founders predominantly from a few elite universities. To address this imbalance, venture capital firm Daphni has launched Time4, a €100 million fund aimed at investing in diverse French founders from rural areas and underrepresented backgrounds.

Fundraising for Time4 began in September, driven by the belief that there is untapped economic potential among these entrepreneurs. Daphni has partnered with HEC Paris and two nonprofits, Les Déterminés and Live for Good, to provide more hands-on support and mentorship. The fund plans to invest in around 100 projects, offering larger initial investments to help founders who may lack financial backing.

Time4 also aims to inspire individuals from various backgrounds to pursue ambitious entrepreneurial goals. It will consider funding entrepreneurs from modest socioeconomic backgrounds, remote areas, jobseekers, individuals with disabilities, and those with unconventional career paths. The fund is committed to supporting projects that enhance social ties and improve access to essential services.

While Time4 has identified nearly 800 potential projects, it will not begin funding until mid-next year, targeting its first closing for that time. The initiative has been presented at Bpifrance’s Quartier Général event, coinciding with efforts by Bpifrance and other organizations to boost entrepreneurship in underserved neighborhoods. French Tech Tremplin, which supports underrepresented entrepreneurs, has recently appointed Paul Lê, whose successful grocery delivery startup La Belle Vie serves as an example of the potential for future successes in the French startup landscape.

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