The dawn of staff-less, AI-powered companies

Good morning there,

Tech opportunists have been on the hunt for ways to milk the cash cow of generative AI since ChatGPT took the world by storm at the end of 2022. But while building autonomous businesses — startups run entirely by AI — has eluded the realms of possibility until now, an increasing number of startups think they’re close to cracking it. Tim Smith looks into them below. 

Elsewhere today, Swedish steel maker H2 Green Steel has raised a mega €4.5bn, Plural has raised its second fund in under two years and Sifted sits down with Creandum’s Simon Schmincke.

— Kai Nicol-Schwarz, reporter

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The dawn of the autonomous company

Ever since ChatGPT arrived on the scene, many opportunists have been looking at the technology and wondering how they can turn it (quite literally) into a money-printing machine. 

Surely a system that’s read and digested most of the internet has some kind of competitive advantage over us lowly humans, right?

As it’s turned out, creating fully autonomous businesses that can just be left to their own devices to generate sweet, sweet profit has proved quite difficult. The most successful startups in the sector so far are those that apply the technology to one very specific problem in one industry.

But now an increasing number of startups think they’re close to cracking that holy grail of AI. I’ve recently been speaking to startups developing so-called “AI agents” — or as London-based 11x calls them “digital workers” — which draw on the impressive abilities of large models like OpenAI’s GPT-4, but are then able to go and carry out useful jobs.

Founder and CEO Hasan Sukkar told me about one example — 11x’s AI sales development representative, called Alice — which is already in use at 50 companies and can outperform the average human worker in generating sales leads.

Other companies like London-based Honu are trying to build what they call “decision infrastructure” technology that it says will be able to orchestrate a host of third-party agents, and use AI to autonomously optimise your business and how it spends its money.

CEO Imad Riachi says he thinks we’ll see a profitable autonomous business “sometime next year”, and that it’ll likely be in a field like ecommerce.

Both founders say that we’ll see big disruption to the way our economies function, as jobs like CEO become more about being a “gatekeeper of company values”, as the AI system will be better placed to make rational or logical decisions.

Jobs will disappear as well, as it takes fewer people than ever before to launch a successful company. Riachi and Sukkar say this will be offset by the fact that we’ll see more business creation than ever before, as the barrier to entrepreneurship lowers. 

And while the idea of fully robot-run, money-printing autonomous companies might seem like science fiction, it really just follows the way in which CEOs have been automating away elements of our work for decades with software and AI. 

Taking this idea to its extreme will also compound many of the economic issues we’ve seen since the dawn of the internet, like rising economic inequality, as an ever-smaller number of skilled individuals are able to make money with the help of fewer workers. 

And while startups solve these technical problems, we need to ask whether our politicians are preparing adequately for a world where creating commercial value could generate far less income tax than ever before, as employee numbers per company fall.

Another question is: how many robot-run ecommerce sites does society really need and is that the kind of economy we want to build? Read the piece here.

— Tim Smith, news editor

🇸🇪 Swedish steel maker H2 Green Steel has secured €4.2bn in debt financing and a fresh €300m in equity. The company, which is part of a new breed of startups building infrastructure, has now raised €6.5bn in combined debt and equity financing for its hydrogen-powered steel plant in northern Sweden.

• It’s been a landmark month for the infrastructure asset class. BlackRock, the world’s largest money manager, struck a $12.5bn deal to buy investment group Global Infrastructure Partners, making it the world’s second-largest manager of private infrastructure assets. It was also a backer of Swedish gigafactory company Northvolt’s convertible loan last August.
• Yesterday, Australian financial group Macquarie announced an €8bn European infrastructure fund. Only a small number of startups have managed to dip into its large pockets: they include French gigafactory Verkor and carbon capture developer Storegga, based in the UK.

🤑 VC Plural has raised a second fund of €400m. Set up by former founders Taavet Hinrikus, Ian Hogarth, Sten Tamkivi and Khaled Helioui, it comes just 18 months — and 26 investments — after the firm’s first €250m fund.

• Of those 26, 31% are into AI, 16% into “frontier tech” and 14% into climate tech. Each partner has done two investments per year — typically writing cheques of €1m-15m into early-stage European companies.

🤖 A16z- and Sequoia-backed AI voice startup ElevenLabs has raised an $80m Series B — its third round in 12 months after a $2m pre-seed in January 2023 and a $19m Series A in June. The fresh funding sees the startup hit unicorn status. 

• The company began life converting text to synthetic voices using AI-powered tools, but in the last year, has shifted to dubbing for entertainment, gaming and media. 
• It plans to spend the lion’s share of its new funding round on research and building its team. 

✈️ Barcelona-based unicorn TravelPerk has raised more than $104m in an extension of its $160m Series D round in April 2021. The new funding will allow the company to improve its business travel platform with AI capabilities.

• SoftBank led the round and was joined by investors including Kinnevik and Felix Capital. TravelPerk’s valuation has been boosted to $1.4bn, the company says.

🤝 French employment site Welcome to the Jungle has acquired UK-based and Tiger Global-backed HR tech Otta, a platform that matches jobseekers to relevant roles. The acquisition — for an undisclosed amount — will enable the company to expand its presence in Europe and start operating in the US, which is a big market for Otta.

• Last year, Welcome to the Jungle founder Jérémy Clédat told Sifted that the company would use part of its €50m Series C to fund its acquisition strategy. “If you look at the HR market today, it is in consolidation mode. So we are starting to look if there are interesting M&A opportunities to strengthen our product or find a team that already covers a new geography,” he said. 
• Otta’s earliest backers include LocalGlobe, Paul Forster, Shakil Khan, Duncan Jennings, Matt Robinson and Carlos Gonzalez-Cadenas.

🗣️ No big fintech is going to IPO soon — that’s what one of Europe’s big fintech investors, Creandum’s Simon Schmincke, predicts about the IPO window in 2024.

• Sifted sat down with the VC to dig into the big challenges fintech startups face this year — from justifying their valuations to public investors and private buyers, to the rise of M&A and the biggest topic in fintech boardrooms right now. 
• “We see a lot of fintechs that are coming to the realisation that what they have to offer isn't maybe a sustainable business — 70 out of 100 fintechs,” Schmincke tells Sifted.

Prague-based Better Stack, a platform to help developers monitor bugs and resolve incidents faster, raised $10m in funding. KAYA led the round.

Copenhagen-based Reel, a B2B renewable electricity supplier, raised €5m in seed funding. Transition led the round and was joined by investors including UVC Partners and The Footprint Firm.

Utrecht, Netherlands-based Eddy Grid, an energy storage startup which combines batteries with energy management software, raised €1.5m in funding. Graduate Entrepreneur Fund and Herberth Samsom led the round and were joined by investors including Rockstart and Volve Capital.

Dublin-based Marama Labs, a spectroscopy sensor and data analytics company, raised €1.5m in seed funding. The Yield Lab led the round and was joined by investors including New Zealand Growth Capital Partners, Icehouse Ventures and Quidnet Ventures.

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