The appetite for generative AI — AI that turns text prompts into images, essays, poems, videos and more — is insatiable. And the investment dollars keep flowing, not shockingly.
According to a PitchBook report released this month, VCs have steadily increased their positions in generative AI, from $408 million in 2018 to $4.8 billion in 2021 to $4.5 billion in 2022. Angel and seed deals have grown, as well, with 107 deals and $358.3 million invested in 2022 compared with just 41 and $102.8 million in 2018.
Crunchbase broke down some of the biggest winners in an early February dispatch. In the video category, WSC Sports, which uses AI to generate personally tailored video clips for sports fans, landed $100 million in Series D funding nearly a year ago. In the writing space, Jasper, developer of a platform that helps create and vet original marketing content, raised $125 million in an October round led by Insight Partners, valuing it at over $1 billion.
The surge in interest from early-stage VC companies alone is staggering, with a total of $2.2 billion raised in 2022. Language model developer Anthropic has secured a whopping $1.3 billion in VC funding. OpenAI has raised over $1 billion. Cohere, Inflection and Stability AI have all raised over $100 million, which are all very respectable sums.
So why the massive influx of cash?
First, the declining cost of training cutting-edge machine learning tech and advances in research have propelled both in-house teams and startups alike. Models like the open-source text-generating GPT-Neo and text-to-image Stable Diffusion made it possible for ventures large and small to jump on the generative AI train, while open efforts such as EleutherAI, which developed GPT-Neo, have made available models that previously would’ve been gatekept by large commercial labs (e.g., DeepMind).
Another factor driving the generative AI investment is the increased interest from public cloud providers. Recognizing the revenue opportunity, providers are making significant acquisitions and striking generous partnerships to get ahead of the rest of the crowd.
Here’s a question for you: How seriously should we take Amazon’s home robotics play? Perhaps a better way of framing it is: When do we take Amazon’s home robotics play seriously? I realize these sound like pointed questions, and I should specify that they’re not really specific to Amazon. They’re more a result of having been burned in the past.
The road to the home robot is littered with fine intentions from companies large (Sony) and small (Anki, etc.). For decades, robots have been a kind of industry shorthand for forward-thinking innovation. Want the world (and, more importantly, shareholders) to know you’re focused on the future? Roll a robot out at your press conference, and who cares if it ever comes out?
Amazon’s obviously addressed that last bit of potential criticism. Astro came out. Announced a year ago this week, the company launched the robot as part of its “Day One Edition” program, offering it up with limited availability at a steep price ($1,500). During a call before yesterday’s Alexa event, the company’s head of consumer robotics, Ken Washington, bristled when I implied that the Astro rollout found the company testing the waters of piloting the robot.
Image Credits: Amazon
“[Day One] is a way for us to put these products in their hands quickly,” the executive told me. “Not for us to — not learn their interest — learn what they want to see most to be added to it.… We’ve had hundreds of thousands of inbound requests and we continue to manufacture and deploy Astros to those customers who make those requests. I can’t share the actual sales quantity because we don’t share the data. But we’re off to a great start.”
To a certain extent, I think the pushback is about framing. I see Astro’s early run as an attempt to determine whether people ultimately want this manner of home robot. Amazon appears to take that want as a kind of foregone conclusion and instead looks at the program as a way to determine precisely why people want Astro. With the announcement of a new SDK being offered to the University of Michigan, Georgia Tech and the University of Maryland this year, it’s probably time to start thinking of Astro as a platform first.
Image Credits: irobot
There’s a sense in which the company is almost working backward from the iRobot model. The company determined a need (vacuuming) and made a purpose-built robot for that function. iRobot tends to be extremely deliberate in its approach. That’s why it took so long for the firm to introduce a proper two-in-one vacuuming/mopping robot.
“The customer is very excited about the convenience of a two-in-one robot, so we needed to build one,” CEO Colin Angle tells TechCrunch. “But, being iRobot, we needed to actually build one, as opposed to doing it in a way that doesn’t deliver on the promise. Right now, most two-in-one robots are really one-plus-one.”
Of course, assuming the FTC doesn’t put the kibosh on the deal (not yet a foregone conclusion), the two are about to be part of one big, happy family. If iRobot does end up rolling into Amazon’s consumer robotics line, it will be impossible not to take the company’s ambitions seriously. Certainly the way the company has accelerated the warehouse and fulfillment robotics categories are a clear indication of what the company is capable of doing with essentially unlimited resources. And while it’s already built its own home robot, it’s easy to imagine the Roomba serving in a similarly foundational capacity as Kiva for its consumer robotics play, going forward.
We got a whole bunch of news to get through this week. Gonna kick things off with a fun one. Back in July 2021, we covered the news that Agility Robotics’s Cassie ran a 5K. It was an impressive feat and a nice feather in the cap of the OSU spinoff. The company has, of course, become better known for Cassie’s follow-up, Digit, but the original ostrich-inspired robot is still involved in some interesting locomotion work in a handful of universities.
Agility CTO Jonathan Hurst tells TechCrunch:
Many dynamic behaviors are hard to represent mathematically, especially any physical interaction like walking or running. Machine learning techniques have the potential to represent that complexity, but so far have struggled to find good solutions or to translate from a simulation to a real machine. We’re figuring out how to use our expertise and knowledge of legged locomotion to guide the machine learning process, and getting results that outperform other techniques. That’s exciting! There’s no free lunch — a machine learning system likely won’t discover useful new behaviors on its own; we have to understand the goals and guide it well.
This week, the Amazon-backed startup announced that the ’bot has captured a world record, running 100 meters in 24.73 seconds (it’s a feat the company teased during a panel at our July Robotics event). That’s still a ways from Usain Bolt’s 9.58 seconds, but is still an extremely impressive feet for a bipedal robot nonetheless (there’s also something to be said for knowing that we can still outrun them for a bit longer).
Avidbots’ NEO in action Image Credits: Avidbots
Big raise for Avidbots this week. The Canadian firm announced a $70 million Series C for its industrial floor-cleaning robots. The round was led by Jeneration Capital and features True Ventures, Next47, SOSV, GGV Capital, BDC Capital, Golden Ventures and Kensington Capital. It brings the company’s total raise up to $107 million.
Avidbots plans to add an additional 100 people in product, engineering, sales and marketing over the course of the next year. Says CEO Faizan Sheikh:
We are very excited about the future as this financing allows us to accelerate our timelines for bringing new products to market as well as continuously improve our autonomous driving software and service for existing customers to deliver an even better experience and greater value.
Image Credits: Livin Farms
One of the more interesting users for robotics I’ve come across in recent weeks is Livin Farms. The Austrian firm raised $5.8 million for its Hive Pro system, which rears black soldier fly larvae for sustainable protein powder.
“[O]ur customers contribute massively to fixing the broken food system and therefore saving the planet,” CEO Katharina Unger said in a comment to TechCrunch. The process takes around 11 days, at which point the larvae “will become half a ton of biomass plus half a ton of fertilizer.”
Natasha has an interesting bit of news out of Europe this week. The EU recently updated liability laws to include artificial intelligence. The new AI Liability Directive will make it easier to sue systems like drones, robots and smart devices.
“The principle is simple,” justice commissioner, Didier Reynders, told TechCrunch. “The new rules apply when a product that functions thanks to AI technology causes damage and that this damage is the result of an error made by manufacturers, developers or users of this technology.”
Meanwhile, Rita wrote about an initiative designed to break China’s reliance on U.S.-designed semiconductors. It’s easy to understand the motivation here, given how much U.S. sanctions during the Trump administration sidelined Huawei in the past few years. Horizon Robotics is leading the way with a massive $3.4 billion in funding thus far.
Image Credits: Tesla
And finally, we’re ramping up for Tesla’s AI day. The event is tomorrow, and I plan to stay up late to help Kirsten cover it — and get a sneak peek at the company’s long-teased Optimus robot. Let’s just say my expectations are sufficiently tempered, but I’m open to being pleasantly surprised.
We’re stoked for what’s shaping up to be a glorious Startup Battlefield competition at TechCrunch Disrupt on October 18–20 in San Francisco. Twenty of the most promising and creative early stage startups — chosen from the elite Startup Battlefield 200 — will go toe-to-toe for bragging rights and $100,000.
This year’s contenders will have to work hard to impress the seasoned VCs who will hear their pitches and follow up with a tough Q&A. We’re excited to announce that we’ve added a fifth tranche of judges — be sure to check out the other Startup Battlefield VCs judges in rounds one, two, three and four.
Wait, did you know? Startup Battlefield isn’t just thrilling to watch; it’s also a masterclass in how investors think. The judges’ feedback provides insight into the criteria they use to determine whether a company is viable or not. Watch and learn what investors look for, what motivates them and what pushes them to schedule a meeting.
Without further ado, here are four more expert VCs ready to help determine the next Startup Battlefield champion:
Ann Bordetsky, a partner at New Enterprise Associates (NEA)
Bordetsky, who joined NEA as a partner in 2021, focuses on consumer and enterprise technologies with particular interest in the future of work, commerce and platforms. She has helped build some of Silicon Valley’s most iconic technology companies in a variety of business, strategy and operating executive roles, and she’s a leading force in catalyzing diversity in tech as an operator, angel investor and advisor to January Ventures.
Prior to NEA, Bordetsky served as COO at Rival, a modern enterprise platform for live event commerce (acquired by Live Nation) and an active operator angel investing in early-stage SaaS, marketplace and consumer digital startups. Previously, as director of business development and strategic initiatives at Uber, she led growth initiatives, strategic partnerships and new vertical formation.
Before joining Uber, Bordetsky was the head of commerce and consumer product business development at Twitter, and she held a variety of business-development and GTM roles at early-stage marketplace and mobility startups (Wheelz and Better Place).
Bordetsky holds an MBA from Stanford University and a BA in environmental science, policy and management from the University of California, Berkeley.
Bryan Offutt, a partner at Index Ventures
In 2018, Offutt joined Index, where he focuses on enterprise investments with an emphasis on design. He is particularly interested in the consumerization of enterprise and the use of design to improve the approachability of highly technical products. Offutt is also one of the hosts of Index Venture’s new podcast series, “Hands On.”
Prior to joining Index, Offutt worked as product manager at MemSQL, where he focused on deployability and user interfaces. He began his career at Palantir Technologies, where he served as an engineer and product manager on work that spanned federated search, data ingestion, data collaboration and access control.
Offutt graduated from Stanford University with a BS in computer science, focusing on artificial intelligence.
Alison Rapaport Stillman, the founding and managing partner at Serena Ventures (SV)
Stillman oversees portfolio management and sourcing new investments at SV. In addition to growing the reach and impact of the SV portfolio, she is the person founders turn to when they need pointed advice, detailed feedback and tough love.
Stillman holds a BS from the University of Pennsylvania’s Wharton School and an MBA from Harvard Business School, and she is a CFA charter holder.
Since E-bike manufacturer Ride1Up closed a $6.5 million Series A led by Ecosystem Integrity Fund, the San Diego-based company has seen steady sales growth since its launch in 2018, especially as consumers switched to ebikes during the pandemic over public transit. Indeeed, last year ebikes reportedly outsold EV and plug-in hybrid automobiles.
So it was high time we tried out one of their bikes.
While the Ride1Up Prodigy is a mid-drive electric bike at an affordable price, this belies its quality as an electric bike, even at this price point.
Most hub motor electric bikes (these have the motor in the center of a wheel) can be slightly awkward to ride because of this drive positioning. Not so with the Ride1Up, which I found had a very natural feel when riding.
Even though mid-drive bikes can be pricier, somehow the Ride1Up Prodigy has managed to come in at a relatively affordable $2,295 – an unusual price-point for this design.
With plenty of power at your disposal, via the German-made Brose TF Sprinter motor (which is incidentally, pretty quiet) you will literally fly off the mark at the lights.
A small assist can get much faster just by pushing harder on the pedals, which made me wonder if some clever algorithm was at work.
Although limited to a set 15.5 mph (25 km/h) speed by law in European zones, the bike will hit 28 mph (45 km/h) if unfettered elsewhere, and has a published 30-50 miles (50-80 km) of range.
Ride with the power on all the time and you will only get the 30 miles. But at the lower power level you could easily get to the 50 mile range, should you need it. Most people will end up in the middle, which is plenty of scope.
There is no throttle, so you must continually pedal, but this means you will end up getting more range, which is fine for a commuter or a leisure ebike like this.
Featuring hydraulic disc brakes, aluminum fenders, Selle Royal Viento saddle, rear rack, built-in LED lighting, Shimano Alivio transmission (with 9 speeds), and a handlebar display, the bike doesn’t seem to skimp on the extras.
The Ride1Up Prodigy XR, has a step-through frame and the XC version is a cross country version with a suspension fork.
Ride1Up Prodigy Tech Specs
Motor: Brose TF Sprinter mid-drive
Top speed: 28 mph (45 km/h)
Range: 30-50 miles (50-80 km)
Battery: 36V 14Ah (504Wh)
Weight: 50 lb (22.7 kg)
Load capacity: 300 lb (136 kg)
Frame: Aluminum alloy
Brakes: Dual-piston hydraulic disc brakes
Extras: Brose color display, Shimano Alivio 9-speed transmission, front and rear LED lights, included high-quality rack and fenders, kickstand
Price: In the region of $2,295
The Tesla Cybertruck is not yet in existence thanks to multiple delays. But when it does come, Elon Musk promises it will also have the ability to “briefly” act as a boat — if the need arises.
“Cybertruck will be waterproof enough to serve briefly as a boat, so it can cross rivers, lakes & even seas that aren’t too choppy.” the tweet reads.
Musk’s reasoning behind the waterproof functionality is that the Cybertruck will need to be able to travel from Starbase — a SpaceX’s facility located at Boca Chica, Texas — to South Padre Island, which requires crossing the channel.
Needs be able to get from Starbase to South Padre Island, which requires crossing the channel
Musk did not expound upon what “briefly” means. And some Tesla owners may scoff at the waterproof claims. Tesla Model Y vehicles have been criticized by owners and reviewers for their leaky front trunks.
There are examples of other EVs, including Tesla vehicles being able to drive through several feet of water. For instance, Rivian recently posted a video on Twitter showing the R1T truck driving through a deep lap pool as part of a test.
Putting in a little work at the lap pool.
Driving video was filmed with professional drivers on a closed course designed for testing purposes. Be responsible. Drive safely. pic.twitter.com/gpcdjIAnIU
Tesla first unveiled the Cybertruck in November 2019. Consumers had a mixed reaction to the Cybertruck, with some hailing it as a triumph and others highly critical of its size and design. Even the harshest criticism didn’t prevent thousands of people plopping down the $100 reservation fee for truck.
At the time, Musk said production would begin in late 2021. A tri-motor AWD version was expected go into production in late 2022. Neither one has yet to be produced. While prototypes have been spotted on public roads since 2019, details have been scant and production has been repeatedly delayed.
Taiwanese electronics manufacturer Foxconn has begun production of Lordstown Motors’s electric pickup truck.
The news, which Bloomberg grabbed first, is a milestone for both companies: Foxconn as it diversifies from manufacturing consumer electronics like iPhones to electric vehicles, and Lordstown as it finally gets its much-anticipated Endurance truck off production lines and, hopefully, into customers’ hands.
The company further shed some weight by selling off its Lordstown, Ohio factory, which it had previously purchased from General Motors, to Foxconn for $230 million. Foxconn agreed to make Lordstown’s EVs for it, but the company will also use the Ohio factory to produce EVs for Fisker, another EV SPAC.
The production volume of the Endurance pickup will ramp slowly, with a slight crescendo in November and December, because of those pesky supply chain constraints, according to a statement from Lordstown. Very slowly, it seems. So far, two commercial release production vehicles have rolled off Foxconn’s production line, with the third “expected to be completed shortly.” Three almost down, 47 to go — Lordstown intends to deliver about 50 units to customers beginning in the fourth quarter, and the rest of the first batch of 500 units in the first half of 2023, if it can raise more money.
That caveat is key, and is possibly one of the reasons why, despite this milestone, Lordstown’s shares are down 7.18% at 12:00 p.m. ET. Turns out building electric vehicles from the ground up is incredibly difficult and expensive, a hard truth that fellow EV SPACs Nikola and Lucid Motors are also coming to grips with as they, too, try to raise additional capital.
Lordstown said it will end the quarter and the year with about $195 million and $110 million in cash and cash equivalents, respectively. But that’s likely not enough to scale production. To make it past 50 pickups, the company is looking to its old pal Foxconn, as well as other strategic partners, to get the cash it needs to keep this business going. As part of Foxconn’s purchase of the Ohio factory, the two companies entered into a joint venture to co-develop EV programs, and it’s this spring that Lordstown will attempt to tap. Foxconn, which owns 55% of the JV, already loaned Lordstown $45 million to support the EV-maker’s own capital commitment to the JV.
It’s worth noting that Foxconn’s reputation for delivering isn’t exactly pristine, either. The company has struggled to get a planned $10 billion LCD factory in Wisconsin off the ground — a project that former U.S. President Donald Trump once called “the eighth wonder of the world.” Earlier this month, Foxconn reduced its planned investment in the factory to a measly $672 million and cut the number of new jobs to 1,454 from 13,000.
The IPO market is still frozen like a Nordic lake dotted with fishing huts, but there are signs that a thaw is now in sight.
News from Insider indicates that TripActions, a unicorn in the corporate travel and expense category, has filed confidential paperwork to go public. Per the publication, the company is targeting a Q2 2023 public debut at around a $12 billion price tag. (Bloomberg’s Katie Roof, a former TechCruncher, first reported that TripActions was eyeing an IPO).
The news warmed our hearts, as we have heartily missed S-1 filings, a particular flavor of startup news that we feasted on during the 2021 boom but were forced to learn to live without this year as falling public-market prices and lackluster returns from some prior debuts slammed shut the IPO window a few quarters back.
Mix in the fact that we are — still — expecting a late-2022 Instacart S-1 filing and perhaps even debut, we now have not merely two IPOs on our dockets, but two potential decacorn public offerings. These are going to be big, noisy, large-dollar transactions that will provide valuable data concerning market appetite for tech shares generally and shed light on two important startup sectors’ respective worth. Hell yeah, we’re excited. Nothing like a little new data to fill in the gaps in our understanding of today’s market.
Today, we’re going to discuss what we hope to learn from each IPO filing and which startups will be impacted by those particular data points.
The Exchange explores startups, markets and money.
Starting with Instacart because it’s ground that we’ve trod before, we know that the company’s revenue is accelerating and that it reached terrific scale thanks to COVID-19 shifting consumer behavior closer to its product.
We also recently learned that the company is slowly trimming staff, likely to get its profit metrics in the right spot to sell stock to public-market investors; the word of the day is profit, or perhaps “efficiency instead of merely growth,” after all.
Financial institutions have struggled to develop their own technologies, hence the rise of neo-banks which used Open Banking regulations to build their own Fintech stacks. That has led to a wave of innovation, and startups have hungrily devoured the opportunities to ‘platformise’ the financial work.
The latest is fintech SaaS provider Toqio which has now closed €20 million in funding.
We last caught up with Toqio, a fintech platform with a white label digital finance SaaS that allows anyone to launch a new fintech product, last year when it raised $9.4M Seed.
This time round, the €18.7M Series A investment was led by AlbionVC and includes Aldea Ventures, as well as previous investors Seaya Ventures, Speedinvest, SIX FinTech Ventures and angel investors, including Leandro Sigman, Board Member at Endeavor Spain. Plus, there is a €1.3M grant from The Centre for the Development of Industrial Technology (CDTI) a public organization for technology development in Spain.
Toqio’s customers include Crealsa, Paysme, Blackstar Capital and MovePay, and has a marketplace that includes include Clear.Bank, Currencycloud, Modulr, and Railsr.
Eduardo Martinez Garcia, CEO & Co-Founder of Toqio, said in a statement: “After rapidly growing our team and entering the Spanish market, we’ll now be broadening our focus within Europe, including expansion into France and Germany.”
The round was led by Emil Gigov and Jay Wilson of AlbionVC with Jay Wilson joining the Toqio Board of Directors following the investment.
Jay Wilson, Investment Director at AlbionVC, added: “The digitization of finance is only just beginning and Toqio has a massive market to go after.”
Team has grown across all offices – London (HQ), Madrid and Nairobi. Over 100 in the past year.
Founded in 2019 by Eduardo Martínez and Michael Galvin, the teams behind Toqio previously built a small business SaaS startup, Geniac, which was acquired by Grant Thornton.
In sub-Saharan Africa, only 33% of the urban population has access to public transportation, compared to 75% in Europe and North America, according to UN statistics. That means that most of the continent faces challenges chasing new job opportunities, going to school, accessing healthcare and just having a night on the town.
This lack of access to transportation is in stark contrast to other upward metrics on the African continent, like its growing access to equitable education and healthcare. In fact, Africa has the largest return on education of any continent, with each year of schooling raising earnings by 11% for boys and 14% for girls. The combination of an increasingly educated workforce and still-sucky public transportation means the way people move is ripe for disruption. Treepz, the Nigerian startup that’s scaling its bus-hailing service across the continent, might be one of the main drivers of that disruption.
“We can’t continue to complain about the downturn. I’d say it’s helping us become sturdier.” Treepz CEO Onyeka Akumah
Since Treepz, formerly Plentywaka, was founded in 2019 in Lagos, the startup has expanded west into Ghana and east into Uganda. Co-founder and CEO Onyeka Akumah said those locations will serve as launchpads for further expansion across the sub-Saharan region.
We caught up with Akumah, whom we first interviewed a year ago, to check in on Treepz’s progress and discuss why a conservative funding environment makes for better business, how the African startup scene is maturing, and what it takes to succeed in transportation technology.
The following interview, part of an ongoing series with founders who are building transportation companies, has been edited for length and clarity.
TechCrunch: You last closed a $2.8 million seed round in November. I’m assuming you’re currently raising for your Series A. How are you finding the funding environment amid the economic downturn?
Onyeka Akumah: We are preparing to raise our Series A, and we already have some interest. Some of our current investors want to invest, but they’re waiting for us to go to market. We were about to go to market before the downturn in the economy hit.
The funding environment has changed, certainly, with the downturn. The funding cycle used to be around six months for a round to pull through, and now we’re seeing it take 12 to 18 months to close. You’re seeing investors make a lot more time for due diligence.
The firm has steadily grown its assets under management since first launching five years ago. Its first fund closed at $11.5 million, its second fund closed with $33.6 million, and today, it announced the close of its third fund, with $46.1 million in capital commitments.
The fund is Hustle Fund’s biggest standalone investment vehicle to date, and propels the firm’s total AUM to over $125 million. However, Bahn explained that this may be the cap for the quirky seed-stage firm. The outfit wants to keep its fund size small, since, according to its partners, small funds can more easily outperform. In other words, Hustle Fund is less about burnout and chasing after ever-bigger numbers, and more about efficiency and execution.
Hustle Fund’s future funds may hover around $50 million, closed every three years. It’s a strategy that is somewhat counterintuitive to venture at large, which is built on the notion that more is, well, more.
At the same time, there’s a lot less in management fees when you have a smaller footprint. Bahn calls it a “paradox,” but he says his team has a solution to it. Specifically, over the years, the firm has quietly built various revenue streams inside the firm. Its biggest revenue generator is Angel Squad, an initiative that is trying to get more people into angel investing through programming, community and access to the firm’s top deals. Over 902 angels have gone through the program, raising a total of $17 million in aggregate to date, according to Hustle Fund;’s website.
Other revenue streams include general startup and advice programming, merchandise, and an annual summer camp for founders.
Not all of it has worked as hoped: Bahn admits that Hustle Fund used to run a revenue based financing fund called Flywheel, but shut it down due to economics being too small. In total, these revenue streams pay many of the firm’s costs while enabling it to invest at the stage and smaller check size where it feels most comfortable.
“It feels like a bit of a cheat code. Almost like being like a featherweight boxer but pumped with anabolic steroids, in terms of being able to have the bite,” he said. “It just allows us to not do things like raise a lot of money just for the management fees.” The firm uses its existing management fees to fund salaries and general fund operations, but then uses the supplemental revenue to scale.
Today, Hustle Fund employs 24 people. The firm declined to offer specifics on how much its non-investment-related revenue totals but said that it crossed a ‘seven-figure’ threshold.
Image Credits: Hustle Fund
While the firm-meets-startup play gets to break new ground with its new fund, its sticking to the same strategy for investment. Hustle Fund writes $50,000 checks, up from $25,000 prior, into a lot of early-stage teams and then works with them on growth and customer acquisition projects. If “we really vibe together,” Bahn explains, the fund makes a bigger investment with its second check.
“We’re deploying capital in a fairly efficient way,” Yin said. “You want to test some initial hypothesis to see if there’s a need if there’s a need, and if there is a need, and the founder seems to be great, then we’re pouring in more capital.” In other words, she added, she’s not looking for startups who are going to pivot around with $5 million in the bank.