Venturized. January 24th, 2023
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Interesting news
📢 British legislators are set to approve a draft of an extensive new social-media bill that could see the chief executives of major tech firms held criminally liable if they don’t protect children from certain content online.
📢 Founders Fund, the venture capital firm co-founded by billionaire Peter Thiel, closed almost all of its eight-year bet on cryptocurrencies shortly before the market began to crash last year, generating about $1.8B in returns. The fund made its first investment in bitcoin in early 2014.
📢 Netflix founder and co-CEO Reed Hastings announced that he would step down after more than two decades at the company. While news of his departure comes as a surprise, Hastings said in an announcement that Netflix has been planning for its next era of leadership “for many years."
📢 Last month, Larry Page and Sergey Brin, Google’s founders, held several meetings with company executives. The topic: a rival’s new chatbot, a clever AI product (OpenAI's ChatGPT) that looked as if it could be the first notable threat in decades to Google’s $149B search business. The new AI technology has shaken Google out of its routine – Sundar Pichai declared a “code red,” upending existing plans and jump-starting AI development. Google now intends to unveil more than 20 new products and demonstrate a version of its search engine with chatbot features this year.
📢 New FTX Chief says crypto exchange could restart. John J. Ray III said he is looking into the possibility of reviving the bankrupt crypto exchange as he works to return money to the failed company’s customers and creditors.
Notable deals
Venture capital:
🚀 PLAI Labs, a startup describing its own mission as leveraging “web3 and generative AI technology to offer the ultimate online social experience,” raised a $32M seed round (yes, like in 2021) led by Andreessen Horowitz. The startup was founded by veteran tech entrepreneurs Chris DeWolfe and Aber Whitcomb. The pair previously co-founded the once-hot social media platform Myspace (which originally sold to News Corp. for $580M in 2005) and the mobile game studio Jam City.
🚀 Link, a startup that claims to be one of the first companies in the US to enable customers to make online payments using their bank accounts, raised a $20M Series A round led by Valar Ventures, with additional participation from Tiger Global, Amplo, Pareto Holdings, and Quiet Capital. Merchants can build Link into their existing purchase flows, whether web- or app-based. Alternatively, merchants can accept payments via a Link-hosted checkout page using a “dynamic links” feature to generate and share payment links with customers. Link customers, from their side, pay by bank transfer, sending funds directly from their bank to a merchant’s business account. Link guarantees the funds, taking on customers’ credit risk — an AI model tries to identify potentially fraudulent or risky transactions before they’re processed.
🚀 CloseFactor, a startup whose platform aims to harvest actionable information about companies from disparate sources, raised a $15.2M Series A round co-led by Vertex Ventures and Sequoia Capital, with GTMFund and Neythri Futures Fund also pitching in. “Built to harness the vast potential in automating manual research by employing machine learning techniques at scale, CloseFactor helps business-to-business sales and marketing teams identify the right target accounts to go after — including the right people at those accounts — so go-to-market teams have the blueprint for executing their strategy and hit their goals,” co-founder Leena Joshi said.
🚀 Cypher, a startup that has developed a non-custodial crypto wallet that allows users to bridge assets across EVM and Cosmos chains and provides proprietary support to on-ramp fiat into crypto, now announced it raised a $4.3M seed round led by Y Combinator last June. Additional participants included OrangeDAO, Samsung Next, and former Coinbase CTO Balaji Srinivasan. CEO Kuberan Marimuthu said in an interview, “the user experience in crypto wallets is like 20 years behind,” which the company plans to fix, along with launching a payment card that allows users to spend their stored crypto.
🚀 Slay, a Berlin startup that has launched a social network aimed at promoting positive interactions for teens online, just raised a $2.7M pre-seed round led by Accel and including 20VC. Additional investors include Supercell co-founder and CEO Ilkka Paananen, Behance founder Scott Belsky, football star Mario Götze, Kevin Weil (Scribble Ventures), and musician Alex Pall (The Chainsmokers). Slay bills itself as a “positive social media network for teenagers” – when users open the app, it shows users 12 questions, which the user can only answer by choosing another user (from school, class, or peer group) to pay an anonymous compliment to.
Exits:
🔥 The messaging platform Discord has acquired Gas, an app whose users sign up with their school, add friends, and answer polls about their classmates that are intended to boost users' confidence. Gas was founded by Nikita Bier, who previously sold a similar app called tbh to Facebook in 2017 — tbh has since been shut down.
🔥 Open source password management platform Bitwarden has made its first known acquisition, snapping up a startup called Passwordless.dev that specializes in helping developers integrate passwordless authentication technology into their software. The news comes shortly after rival Bitwarden (1Password rival) announced its first outside funding since its inception in 2015, securing $100M from PSG and Battery Ventures.
Promising technology
👾 Generated code generates overconfident coders - Stanford University researchers found that programmers who used OpenAI’s Codex, a model that generates computer code, were more likely to produce buggy software than those who coded from scratch. The authors recruited 47 participants, from undergraduate students to professional programmers with decades of experience, to complete security-themed coding tasks. Participants who used Codex generally produced code that was less functional and secure, yet they expressed greater confidence in it:
Members who used Codex to produce nonfunctional code were more likely to rate their answers as more correct than members of the non-Codex group who produced correct code
When coding in Python, participants in the non-Codex group were more than twice as likely to produce secure code
Members of the Codex group who lacked prior digital-security experience were more likely to use unedited, generated code than those who had such experience
👾 ChatGPT is driving the hardware need - In the weeks since the ChatGPT artificial intelligence tool took the world by storm, Nvidia Corp. has emerged as Wall Street’s preferred pick for traders seeking to profit from its potential, as the stock rallied 22% in the first three weeks of the year, placing it among the best performers in the S&P 500 Index. The rationale is simple: Nvidia dominates the market for graphics chips designed for complex computing tasks needed to power AI applications. The more people use ChatGPT, the more computing power its owner OpenAI requires to generate responses to the millions of queries received from lazy students with essay assignments or struggling songwriters.
Insightful data
Deep tech run - European investors poured $17B into deep tech startups on the continent last year, according to Dealroom data. And while that’s down on 2021’s record-breaking $22.8B, it’s still a big leap from the $11.6B and $11.1B invested in 2019 and 2020, respectively.
