Hey — It's Nico.

This newsletter contains:

• 1 failed startup.
• 5 resources for founders.
• 5 startup news.
• 1 hot startup.

This issue is brought to you by Drata:

Security professionals spend an average of 4,300 hours annually achieving or maintaining compliance.

Reduce your workload and duplicate compliance tasks with a central view to manage 14+ frameworks including SOC 2, GDPR, HIPAA, and CCPA. Start simplifying your audits and stay audit ready 24/7 with G2's highest-rated compliance automation platform.

​

Failed startup story: ShopX

ShopX, an Indian e-commerce startup, ceased operations in August 2022. It raised roughly $48M from 2016 to 2020 to help local "kirana" store owners build their online presence.

After receiving funds from Singapore-based investor Fung Investment, Shopx switched its focus to offering a SaaS platform for retailers to connect with brands. The new app aimed to facilitate product sales without needing physical inventory management.

In between the lines:

The lack of finance and low-profit margins in the e-commerce industry were the main factors in ShopX's downfall. When the business was unable to pay its bills, including interest on loans from its investors, it filed for insolvency and bankruptcy.

The company's attempt to pivot from an e-commerce solution to a SaaS platform for merchants failed to generate enough cash flow or secure additional capital to sustain the business.

Lessons learned:

From ShopX's failure, you can see how important it is to understand the sector and its margins and to have a sustainable business plan that can provide enough cash flow.

Startups must have adequate financial management in place - particularly, they need to carefully analyze how borrowing money may affect the company's overall financial stability.

​

What to check this week?

💵 5 interesting tips for coming up with $10M business ideas - by Sam Parr, founder of the Hustle.

💡 Insights from a former tech lead at Google on what it means to be a strategic thinker.

✍️ Brian Bourque highlights the essential 21 Principles from Y Combinator’s startup playbook.

📝 Michael Houck talks about 7 ways founders can extend their runway (without reducing headcount)

👊 Shaan Puri and Sam Parr talk with a billionaire founder about 6 profitable business ideas.

​

What happened this week?

💰 Anthropic, a competitor of OpenAI’s chatbot, is expected to raise $300M in investor funds, leaving the company at a $5 billion valuation.

📊 Stripe considers going public due to alleged pressure from early employees seeking a promised significant exit on their equity.

🛒 Amazon is reportedly planning a Web3 nonfungible token initiative in the second quarter of 2023.

📈 BuzzFeed stock jumps 150% after announcing the company uses AI to help with content creation.

⚔️ Kittl aims to compete with Canva, securing $11.6M in Series A funding for its design platform.

​

Hot startup of the week: Levels

​Levels, a New York-based software company that provides real-time feedback on how food affects health, has raised $7M in a Series A extension funding round. The funding round follows after a $38M Series A round in April 2022.

The company, which has raised more than $55M to date, intends to use the funds to expand operations and continue its growth trajectory.

In between the lines:

Levels success is due to its innovative solution to a common problem: giving feedback on how diet impacts health.

The company’s mobile app offers members individualized information and guidance to help them improve their health by utilizing data from biosensors and other sources.

The company has had strong user engagement and support from its investors.

Lessons learned:

Levels have done extremely well at leveraging technology to provide a unique solution to a common problem. They have been able to effectively leverage data to enhance user experience and build a strong and engaged community.

​

What do you think of today's newsletter?

• ​🔥 Great​
• ​😒 Meh​
• ​👎 Not interesting​

Cheers,

Nico