Startups have to be clever when fighting larger rivals
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You won't find any Founder Mode discourse in this week's newsletter, although the memes keep coming. Instead, here's your usual dose of startup news, from oversized rounds, to pivots, to new product launches.
Most interesting startup stories from the week
When facing bigger rivals, startups often have to be clever on how to fight. There's no right answer, which explains why many change their mind along the way when they don't get a lucky break.
Brighter sky: X's shutdown in Brazil is benefiting rival social network Bluesky, which saw a massive influx of newcomers since last weekend. This was particularly noticeable, as it's still much smaller than Meta's Threads and its 200 million monthly active users.
Chat battle: Anthropic launched Claude Enterprise, a subscription plan for businesses interested in using its AI chatbot, but with admin tools and more security safeguards. It will compete with OpenAI's ChatGPT Enterprise.
Thrown towel: Not long after it raised a $500 million Series B round, German AI startup Aleph Alpha is pivoting away from the LLM fight and into AI support with the launch of a new product called PhariaAI.
Still kicking: NightCafe doesn't get as much publicity as rival Midjourney, but its AI-powered art creation tools have over 25 million users. This also translates into earnings; a source told TechCrunch that NightCafe makes $4 million in annualized revenue.
Piggyback: HR and payroll software company Paylocity agreed to acquire corporate spend startup Airbase for $325 million, almost less than half of its 2021 $600 million valuation. Founder Thejo Kote said Paylocity's size and scale will help bring Airbase to a much larger audience.
Most interesting fundraises this week
More funding is another way to try to get ahead of competitors, but so are differentiation, innovation and going for new markets.
Three months later: Safe Superintelligence (SSI), the mere-months-old startup co-founded by Ilya Sutskever of OpenAI fame, has raised over $1 billion, reportedly at a $5 billion valuation.
AI agents: With $50 million in fresh funding, You.com is narrowing down its focus — it hopes to turn its AI into a productivity engine that will solve complex search queries.
Hospital at home: Doccla, a British virtual ward startup that helps hospitals remotely manage patients, raised $46 million for its European expansion.
Microcapsules: French clean tech startup Calyxia, a B Corp, raised a $35 million Series B round that will help it produce alternatives to microplastics, a growing pollution concern.
MENA fintech: Dubai-based YC alum Ziina raised a $22 million Series A round to keep growing its P2P payments app, which already counts 50,000 retail and business customers.
Most interesting VC and fund news this week
Proven: PruVen Capital, a fintech and insurtech venture firm founded by Ramneek Gupta, a former Battery Ventures and Citi Ventures VC, closed a $378.5 million second fund. Unlike its first fund, which had Prudential Financial as its main LP, this new vintage is also backed by others.
Mainstream climate: The fourth climate-focused fund raised by Dutch firm SET Ventures closed at €200 million, twice the size of its previous one. It will be deployed into 20 to 25 European early-stage startups making renewable energy more mainstream.
AI incubator: VC firm Mayfield Fund allocated $100 million to its newly launched AI Garage, an incubator for ideation-stage founders interested in building "AI teammate" companies.
Last but not least
Palantir's CTO Shyam Sankar has become "a secret weapon for Valley defense tech startups," TechCrunch's Margaux MacColl reported. One of its earliest employees, he started a program called First Breakfast in 2023 that doesn't provide breakfast but does offer a set of software tools that can give new defense tech startups a leg up.