OpenAI's soaring valuation, Silvergate's tumbling shares, and robotic shoes to get you where you're going faster

Thursday! We're now one week away from our first StrictlyVC event of 2023! We are so excited about the evening; we know many of you are, too, because our waitlist is now as long as our attendee list. 

Note that if you are coming, you need to be registered and to bring your ID or you will be turned away by Salesforce.

As a reminder, we'll have plenty of coverage of the event after the fact; we have also created a pass for those of you in far-flung places (as well as San Francisco) who we can't accommodate in person because of space constraints but who may want to tune into the event via a livestream.

Giant thanks again to the global early-stage firm Felicis for its support of the evening; the entire team is so appreciated; we couldn't host this without them. We also want to give a shoutout to Chris Hansel of CBRE for repeatedly offering throughout last year to host something on our behalf and coming through when we decided to take him up on the offer.:)

We're looking to build our next event some time in May. If you'd like to partner on this next one, you know where to find us!

OpenAI, the research lab behind the viral ChatGPT chatbot, is in talks to sell existing shares in a tender offer that would value the company at around $29 billion, according to the WSJ, making it one of the most valuable U.S. startups on paper "despite generating little revenue," notes the outlet. (It reports that to date, OpenAI has generated tens of millions of dollars, in part from selling its AI software to developers, though CEO Sam Altman has reportedly told investors that the company will soon be able to generate up to $1 billion in annual revenue in part by charging consumers and businesses for its products.) Venture-capital firms Thrive Capital and Founders Fund are reportedly in talks to buy at least $300 million worth of shares, which would come from existing shareholders such as employees, say the WSJ's sources. Earlier backers of OpenAI include Khosla Ventures, Tiger Global, and powerful individual investors, including Reid Hoffman.

Speaking of OpenAI: New York City public schools will ban students and teachers from using ChatGPT, the outfit's powerful new AI chatbot tool, CNN reportedly earlier today. The move comes amid growing concerns that the tool could make it easier for students to cheat on assignments. Some also worry that ChatGPT could be used to spread inaccurate information, notes the outlet. A spokesperson for OpenAI tells TechCrunch that OpenAI is developing “mitigations” to help anyone spot text generated by ChatGPT. TechCrunch reported separately recently that OpenAI was experimenting with a watermarking technique for AI-generated text. 

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Can Katrina Lake save Stitch Fix? The founder of the nearly 13-year-old, subscription-based online personal shopping service is going to try, returning today to her role as CEO 17 months after stepping down from the position.

As first reported by CNBC, it was Lake who today informed the company's 1,700 salaried employees in a companywide email that 20% of them are getting cut in a drastic cost-saving measure. Stitch Fix further confirmed to CNBC that the brand’s Salt Lake City distribution center will also be closing and that employees at that center will be laid off, though it declined to disclose how many people work there.

TechCrunch separately reached out to Stitch Fix for comment and was sent a press release stating that Lake plans to "serve in an interim capacity for six months or until her successor is appointed, unless otherwise agreed by Ms. Lake and the Board of Directors."

The bearer of bad news may have surprised some. Lake founded Stitch Fix in late 2010 and took the company public in 2017. At the time, she was the youngest woman to do so. But in August of 2021, she relinquished her day-to-day oversight of the company to become its executive chairperson, a role Lake said at the time she would use to focus on Stitch Fix's sustainability efforts and its marketing. In her stead, Stitch Fix promoted to the role of CEO Elizabeth Spaulding, who joined the company as president in 2020 and worked previously as a partner at Bain & Company.

Spaulding oversaw one layoff already in June of this year when Stitch Fix confirmed that it was shedding 330 jobs, or 15% of its salaried workforce, owing to its changing fortunes. To wit, while shoppers actively used Stitch Fix while trapped in their homes during the pandemic, the business suffered as COVID-related restrictions were lifted and those same customers ventured out to spend some of those discretionary dollars. Further, says CNBC, a direct-buy option instituted during Spaulding's brief tenure, wherein Stitch Fix invited customers to buy single items without signing up for a plan or paying a styling fee, appears not to have panned out.

More here.

HighTide Therapeutics, a 12-year-old, Rockville, Md., and Shenzhen, China-based biopharmaceutical company developing multifunctional therapies for metabolic and digestive diseases, says it has closed a on $107 million in Series C and C+ funding led by the TCM Healthcare Fund of Guangdong, managed by China Development Bank Capital. Other investors included Yuexiu Fund and Yuthai Fund. More here.

Netskope, a 10-year-old Santa Clara, Ca., outfit that provides cloud security services, raised $401 million in a convertible note led by Morgan Stanley Tactical Value, with Goldman Sachs Asset Management, Ontario Teachers' Pension Plan, and CPP Investments also participating. The company, which has has raised over $1 billion, closed its previous round of $300 million 18 months ago at a $7.5 billion valuation. CRN has more here.

Silicon Ranch, an 11-year-old Nashville company that operates solar and battery storage systems, raised a $375 million round and expects to pull in an additional $225 million "in early 2023." Previous investors Manulife Investment Management, TD Asset Management, and Mountain Group Partners contributed to the round. The company has raised a total of $1.2 billion. More here.

Eduvanz, a six-year-old Mumbai startup that provides loans to students to finance their school, coaching, and test prep fees, raised a $12.6 million Series B extension round led by Rethink Education, with additional participation from Sequoia Capital, Juvo Ventures, and Unitus Ventures. The company has raised a total of $50.1 million. Entrackr has more here.

LinusBio, a two-year-old New York startup that has developed a new test that claims it can detect markers for autism from a single strand of hair, raised a $16 million Series A round co-led by GreatPoint Ventures and Bow Capital, says Axios. NBC News has more here.

User Interviews, a seven-year-old Brooklyn startup that helps user experience researchers source study participants across different demographics and behavioral criteria, raised a $27.5 million Series B round led by Sageview Capital, with Teamworthy, Accomplice, Las Olas VC, Trestle Partners, ValueStream, Remarkable Ventures, and FJ Labs also contributing. The company has raised a total of $43.5 million. TechCrunch has more here.

Crescendo Health, a one-year-old San Francisco startup that aims to collect longitudinal data for clinical research, including information from other healthcare encounters that might not be collected when patients choose to participate in a trial, raised a $3.4 million round. Define Ventures was the deal lead. MobiHealthNews has more here.

Liberate Innovations, a Palo Alto startup founded this year that says it can enable insurers to fully automate their claims and underwriting processes, raised a $7 million seed round. Eclipse Ventures was the deal lead. More here.

Herself Health, a new, Minneapolis, Mn.-based healthcare tech company designed to deliver advanced primary care to women over 65, says it has raised $7 million in seed funding led by founding partner Juxtapose. The outfit says it is taking an omnichannel approach, starting with the launch of its first clinic, opening today in Minneapolis; later, the brand plans to expand to include home-based and virtual care touch points. More here.

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Hamilton Lane, the 31-year-old Philadelphia-based investment giant, says it has collected $2.1 billion in capital commitments for a direct equity fund. It says backers include public pensions, sovereign wealth funds, Taft-Hartley pension plans, endowments, foundations, high-net-worth individuals and other financial institutions. More here.

Johnson & Johnson's consumer health unit Kenvue yesterday filed for an IPO. The business behind Band-Aid bandages and Tylenol medicines generated net sales of $15.1 billion in 2021, up from $14.5 billion in 2020, according to an SEC filing. Johnson & Johnson, founded 135 years ago, announced its plan to break up into two companies more than a year ago. Reuters has the story here.

Kurly, a South Korean startup that provides next-day grocery delivery service, just announced that it has called off its plan to go public amid worsening economic situations that have put startups’ market debuts on hold. TechCrunch has more here.

Massive crypto lender Genesis Global Trading has laid off 30% of its staff and is considering filing for bankruptcy, according to the WSJ. Genesis suffered steep losses from loans it supplied to the now-defunct trading firm Alameda Research and crypto hedge fund Three Arrows Capital. Genesis is owned by the crypto conglomerate Digital Currency Group, which also operates crypto asset manager Grayscale Investments, crypto news outlet CoinDesk, mining and staking firm Foundry, crypto exchange Luno, data platform TradeBlock, wealth management firm HQ and DCG Real Estate. More here.

Silvergate Bank, a 34-year-old, La Jolla, Ca.-based outfit that caters to companies in the crypto business -- taking their deposits and operating a network that links investors to crypto exchanges -- is teetering after the collapse of crypto exchange FTX sparked a run, forcing the bank to sell assets at a steep loss to cover some $8.1 billion in withdrawals. FTX and other companies controlled by Sam Bankman-Fried accounted for about $1 billion of the bank’s deposits. To satisfy the withdrawals, Silvergate reportedly liquidated debt it was holding on its balance sheet; the $718 million it lost selling the debt far exceeds the bank’s total profits since at least 2013, says the WSJ in a new report. More here.

New York Attorney General Letitia James today filed a lawsuit against Alex Mashinsky, co-founder and former CEO of Celsius Network, alleging that Mashinsky defrauded “hundreds of thousands of investors…out of billions of dollars worth of cryptocurrency.” The lawsuit also claims that Mashinsky “repeatedly made false and misleading statements about Celsius’s safety to encourage investors to deposit billions of dollars in digital assets onto the platform.” Celsius, which was once one of the world’s largest crypto lenders, filed for bankruptcy protection in mid-July 2022. TechCrunch has more here.

A new law went into effect in California this week, and it's now possible to know the salaries that top tech companies pay their workers (before bonuses and equity grants). For example, notes CNBC: a program manager in Apple’s augmented reality group will receive base pay between $121,000 and $230,000 per year, according to an Apple posting this week, while a software engineer at Google Health can expect to make between $126,000 and $190,000 per year, and a director of software engineering at Meta leading teams building network infrastructure will make at least $253,000 and as much as $327,000 in salary per year.

Apple just quietly rolled out AI-narrated audio books.

Explainer: why it's hard for Apple to make iPhones outside of China.

Venture firms' strategy of holding stocks longer has seemingly backfired.

"Did we win?"

The ultimate workday power move.

Bill Gates’s vision for email back in 1993: "Email is not a good way to get mad at someone since you can’t interact. You can send friendly messages very easily since those are harder to misinterpret."

Moonwalkers.

The electric-assist stroller is here.

Ahhhh, Velaa. If you act fast, you may be able to score the "Romantic Pool Residence" in time for Valentine's Day.

Join hundreds of military veteran entrepreneurs, venture capitalists, and early-stage operators at the Military Veteran Startup Conference hosted by Context Ventures on Feb 2nd & 3rd in San Francisco. Build your network and get invaluable insight from panels including the Dual Use Entrepreneurs panel, New Veteran Fund Managers panel, and VIP speakers including Henry Ward of Carta. The event is open to everyone: military veterans, veteran spouses, and civilians. Learn more and register here.