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Today after the bell, Coinbase reported its Q1 2023 financial results, beating expectations by reporting net revenue of $736 million, a $79 million net loss, and adjusted EBITDA of $284 million. TechCrunch has more here.
Lyft shares meanwhile dropped nearly 15% in extended trading today after the ride-hailing company issued a weaker-than-expected forecast for the second quarter. And in the first three months of this year, DoorDash sales surged as consumers continued to rely on online deliveries for food and household items, despite signs of an economic slowdown.
For roughly two hours today in the White House’s Roosevelt Room, Vice President Kamala Harris and other officials told the leaders of Google, Microsoft, OpenAI, the maker of the popular ChatGPT chatbot, and Anthropic, an AI start-up cofounded by former OpenAI employees, to seriously consider concerns about the technology. President Biden also briefly stopped by the meeting. The New York Times has more here.
A senior software engineer at Google has written a critique that's making the rounds, asserting his employer is losing its edge in AI not to OpenAI but to the open-source community, where many independent researchers use AI technology to make rapid and unexpected advances. "While we’ve been squabbling, a third faction has been quietly eating our lunch," he reportedly wrote. Bloomberg has more here.
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| In Europe, Accel Banks on a Turnaround Over the Next Six to Nine Months |
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It’s been almost five years since we sat down with longtime VC Harry Nelis and three other investors from Accel’s London office to talk about the trends rippling through the venture industry. At the time, our talk largely centered on Brexit and SoftBank’s feverish pace of investment, which was beginning to drive other late-stage funds into earlier-stage companies.
Of course, much has changed in the intervening years. Brexit came to pass in January 2020. COVID took hold around the world soon after. A global downturn has also reshaped how investors and founders are thinking about their respective roles — and pushed SoftBank into the background.
To learn how some of these shifts have impacted Accel (thanks to bets like Slack and UiPath, it raised some enormous funds just as things were cooling off), we chatted with Nelis again yesterday. Excerpts from
that catch-up have been edited lightly below for length and clarity.
Your seventh fund closed almost exactly two years ago with $650 million as part of $3 billion in capital commitments that Accel announced in June 2021. This included funds in the U.S. and a global growth stage fund. How much of that fund have you committed?
I think we’re roughly halfway through the fund. Subsequent to that whole fundraising, we raised another “Leaders Fund,” a pre-IPO fund, with $4 billion in commitments in June of ’22. But . . .we’re now in a period where things have slowed down quite dramatically.
We have early-stage franchises in in Palo Alto, London and Bangalore, India; we have two global funds — a global growth fund and a global pre IPO fund. Especially the growth fund and pre IPO fund, the business for them has been very slow because companies raised so much money over the last last few years that they really don’t need any more. And they know that if they were to raise more money, it probably wouldn’t be at a higher valuation. So a lot of them are kind of trying to get as far as they can on the money that they’ve raised. Even the early-stage market was slow for a moment . . . but that has readjusted itself now, and the early stage market is really back again.
Accel downsized one of its funds back in 2001 after the big dot-com bust. The firm couldn’t put the money to work that it had raised, and LPs were meanwhile in a bind because of the downturn. Here we are again. Has Accel talked about downsizing the size of these massive pre-IPO and growth stage global funds?
More here . . .
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Advance Intelligence Group, a seven-year-old Singapore startup that is a holding company for credit products in areas such as lending and risk compliance, raised an $80 million round. Warburg Pincus and Northstar Group co-led the deal. The company has raised more than $700 million. Reuters has more here.
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| Big-But-Not-Crazy-Big Fundings |
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Duetti, a one-year-old New York startup that focuses on music catalog sales, management, and marketing, raised a $32 million round from Viola Ventures, Viola Credit, Roc Nation, Untitled, and Presight Capital. The company has raised a total of $39 million. Music Business Worldwide has more here.
Kreditz, a five-year-old Swedish startup that helps banks and other financial institutions analyze bank transaction data in order to assess a loan applicant’s current income and expenses, raised an $11 million round. Ingka Investments was the deal lead. More here.
Novidea, an Israeli startup that provides a software platform that helps insurance brokers and agents interact with customers, raised a $50 million Series C round led by Battery Ventures, with additional participation from Cross Creek as well as previous investors Israel Growth Partners, KT Squared, and JAL Ventures. The company has raised a total of $90 million. Calcalist has more here.
OpenEnvoy, a two-year-old San Francisco startup that says it uses AI to reduce billing errors and the need for interdepartmental approval processes, raised a $15 million Series A round led by RRE Ventures, with Coelius Capital, Hack VC, Riot Ventures, and Uncorrelated Ventures also chipping in. PYMNTS has more here.
Spread, a four-year-old Berlin startup whose platform connects disparate sources of product data for automotive engineers, raised a $16 million Series A round led by HV Capital and including previous investor Cavalry Ventures and Figma co-founder and CEO Dylan Field. Tech.eu has more here.
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Airspeed, a San Francisco startup that helps to foster connections among employees via Slack, raised a $5 million seed round co-led by Greylock and Venrock, with additional funds contributed by Salesforce Ventures and Next Play Ventures. The company also raised $2.5 million in debt from Western Technology Investment. More here.
EcoSoul, a two-year-old Indian startup that sells eco-friendly goods made from renewable sources, raised a $10 million Series A round led by Accel, with Singh Capital Partners also chipping in. Outlook India has more here.
Kiwi, an Indian startup founded this year that is rolling out a credit card platform and app, raised a $6 million pre-seed round. Investors included Nexus Venture Partners and Stellaris Venture Partners. The Economic Times has more here.
Openlayer, a San Francisco startup that creates tools for testing and verifying machine learning models, raised a $4.8 million seed round led by Quiet Capital and including Picus Capital, YCombinator, Hack VC, Liquid2 Ventures, Mantis VC, Instagram cofounder Mike Krieger, and Instacart cofounder Max Mullen. SiliconANGLE has more here.
Tristero, a San Francisco crypto startup that is creating software infrastructure to enable the creation of private trading markets or "dark pools," raised a $4.8 million seed round. General Catalyst and Steel Perlot were the co-leads. More here.
Viatu, a Swiss startup that is building a platform to enable customers to organize multi-day sustainable travel adventures, raised a $1 million seed round from Ndoto. TFN has more here.
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Discover strategies to get ahead in today’s changing investment environment from MassMutual Ventures and Affinity. They shared trends across key dealmaking activities as well as tips on nurturing your network to maximize deal sourcing and fundraising opportunities. Watch the webinar today.
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Ten months after spending $2.1 billion to buy logistics firm Deliverr, mostly in cash, the Canadian e-commerce company Shopify is offloading its entire logistics operation to Flexport for a 13% stake in the (still private) company The deal also includes 6 River Systems, which Shopify bought in 2019 for $450 million in cash and stock. CEO Tobi Lütke added in a company-wide memo today that Shopify is cutting 20% of its employees. NBC News notes
that Shopify had about 11,600 employees and contractors as of Dec. 31, per a securities filing. The cuts mark the second round of layoffs for Shopify, which last July laid off 10% of its employees after Lütke said it had misjudged how long the Covid pandemic-fueled e-commerce boom would last. More here.
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U.S. Senator Sherrod Brown, chairman of the Senate Banking, Housing, and Urban Affairs Committee, has written a letter to FDIC Chairman Martin Gruenberg expressing concerns about a fintech backed by Andreessen Horowitz called Tellus. TechCrunch has more here.
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Nate Chastain, a former product manager at the NFT marketplace OpenSea, was convicted yesterday of fraud and money laundering for using inside knowledge of which assets would be featured on OpenSea's home page to trade NFTs. He was accused last year of making more than $50,000 in illegal profit. His sentencing for wire fraud and money laundering will be decided by August 22. More here and here.
The U.S. Virgin Islands is having trouble finding Google co-founder Larry Page to serve him a subpoena for its lawsuit against JP Morgan, court documents show. Business Insider explains here.
Former Uber chief security officer Joe Sullivan avoided prison today as he was sentenced for covering up the 2016 theft of company data on 50 million Uber customers while the company was being investigated by the Federal Trade Commission over a previous breach. As reports The Washington Post, U.S. District Judge William Orrick sentenced Sullivan to three years of probation, noting his significant past work in protecting people from the sort of crime he later concealed.
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NFX, the early-stage venture capital firm, is hiring a principal in the Bay Area.
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OpenAI Sam Altman reportedly said in a public appearance yesterday that OpenAI is “going to be the most capital-intensive startup in Silicon Valley history." Besides covering the costs of training its software, it may also need to pay for access to data sets that aren’t on the internet and that it would want to use to develop its AI, reports The Information.
In related news, Demis Hassabis, CEO of Google-owned DeepMind (which is being smooshed into Google Brain to form Google DeepMind), reportedly said at a conference earlier this week that AI is potentially closer to achieving human-level intelligence (AGI) than most other AI experts have predicted. “We could be just a few years, maybe … a decade away,” he is quoted as saying. The Washington Post has more here.
As for Apple, which today topped earning estimates in its own quarterly report, CEO Tim Cook called AI "huge" but cautioned that there are "a number of issues that need to be sorted" and declined to say how Apple will incorporate the latest tech into its products. Axios has more here.
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