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Musk’s 10-month-old baby, xAI, is closing in on a $6 billion funding round. The social network X, née Twitter – also a part of Elon’s technology family – is already a shareholder. The deal was initially expected to raise just $3 billion, but then everyone wanted to get involved and the price increased. Investors include Musk’s best friends at Sequoia Capital, Future Ventures, and a few other buddies who may join this AI party – it’s all very mean at this point: “You can’t sit with us.” But what really frustrates me is how smug Musk seems to be about all of this. That’s fantastic, I’m just bitter that no startup has ever raised $6 million – let alone three orders of magnitude more.
Sure, it might come on the eve of total exile from the US (although, I hasten to add, the previous administration tried that too, and TikTok is still here and alive and well), but TikTok will be insidious in more ways than one. There are rumors on the street (or perhaps on the Internet?) that TikTok is playing hide and seek with Apple. Instead of offering Apple a 30% discount on in-app purchases, it appears they are trying to trick users into purchasing digital tip coins directly from their website. But shh… it’s a secret! This feature is apparently only visible to certain users (I’m looking at you, big spenders). Will Apple give them a run like they did Fortnite? Only time will tell.
Your founding team sucks: : In a brutally honest conversation with me at TechCrunch Early Stage, Tom Blomfield, former founding father of Monzo Bank and current Y Combinator partner, commented on the decision-making of enterprise capitalists. He says investors are looking for unicorns that may deliver 1,000x returns — anything less is an epic failure. They don’t just evaluate your online business model or product. No, they’re looking at you to see if you have what it takes to make their money multiply like rabbits.
The most interesting startup stories of the week
Hi? Is it an iPhone? Why are you so quiet today? Image credits: Vector graphics / Getty Images
Oh EyeEm, you cunning dog! The Berlin-based once-Insta-challenger, a photo-sharing app that nearly went bankrupt last yr, has found a latest way to milk its users – by training future AI overlords! Yes, they sell your snaps to train machine learning models. Users were graciously given 30 days to pack up their digital photo albums and escape, or stay calm (and hand over the photos) eternally. But are you giving up? Not as easy as swiping left on Tinder – you will have to manually delete your photos. But wait… the real kicker might be if in a fit of rage you choose to completely delete your account, you’ll not have any withdrawals. Womp-womp, sad trombone.
It’s like Game of Thrones, but in the world of technology. Welcome to the latest season of Techstars, where CEO Maëlle Gavet fights battles on all fronts in her kingdom! It has a bank failure, the closure of an international accelerator program and suspicious posts on LinkedIn. And that is just for starters. Add to that the mysteries of Swedish labor law and you’ve got got more drama than an episode of The Real Housefounders. If that wasn’t enough, she’s also dealing with a company-wide revolt against her reign, in addition to cost cutting leading to a toxic work culture and hiring people with as much startup experience as my favorite goldfish. (He died in 2007. RIP, Knee-mo). Stay tuned for this gripping saga of power struggles, corporate drama, questionable funds and strategies – I can not guarantee dragons or White Walkers, but there might be plenty of fireside respiratory and icy stares!
Some fun outings
Mark Cuban wrote a check to Truffle Shuffle. No one will comment on whether it was a good decision for the company. Image credits: Christopher Willard/ABC via Getty Images
Cybersecurity company Rubrik decided to take a leisurely stroll down Wall Street this week and BAM! The company’s shares soared 16% upon its public debut. Initially priced at $32 per share (just barely above the goal range), they reached $37 by the end of trading. That’s one way to get in! This little foray boosted their valuation from $3.5 billion in 2019 to a staggering $6.6 billion today. Not bad for a company that may not even profitable yet! Their secret sauce? Subscription revenue – increased from 73% to 91% in just one yr. But hey, who needs profitability when you have stickiness, right? While this may occasionally appear to be the starting of an IPO party parade with Reddit and Ibotta leading the conga, potential rate of interest cuts could soon cause confusion. No doubt Greylock is giggling maniacally all the way to the bank.
ButcherBox, the meat-obsessed startup with a juicy $600 million in revenue, just cut its teeth into the beloved “Shark Tank” Truffle Shuffle. The acquisition is less about absorbing competition and more about helping ButcherBox customers stop overcooking their steaks. Truffle Shuffle was born out of pure desperation when founders Jason McKinney and Tyler Vorce found $20,000 value of truffles but had no restaurants to sell them to, thanks to our dear friend COVID-19.
The most interesting collections this week
RevenueCat founders Miguel Carranza (left) and Jacob Eiting (right). Image credits: Revenue Cat
- Here, baby, baby: : RevenueCat, the fairy godmother of app subscriptions, just scored a cool $12 million to expand its magical kingdom to the web. Purr. It supports 30,000 apps and supports over $2 billion in annual subscriptions. Noise.
- Like a flip phone, but more homey: Get up, people! Backflip just raised $15 million to help real estate investors flip homes. Because why hassle doing old-fashioned manual labor when you possibly can just throw some money at the problem and watch your property value do the gymnastics?
- Sure, I think AI needs a few more dollars: OpenAI startup fund is back in motion, quietly raising $15 million from two investors who apparently enjoy anonymity (hmmmmmm). The documents named Ian Hathaway, the fund’s manager and sole partner – because why share the fun. Remember last yr when eyebrows were raised when it was revealed that OpenAI CEO Sam Altman had every part to say? They said it was “temporary” but it caused drama!
Other stories you possibly can’t miss on TechCrunch…
Bad news for healthcare privacy this week. UnitedHealthcare’s CEO says “maybe a third” of US residents were affected by the recent hack, and Kaiser also pissed off a lot of customer data. Oh, thanks, clowns.
Anyway. Here are some other funny stories. Maybe. Or at least interesting. Or perhaps they only got a metric crap move this week. Who knows what my selection criteria are, but… just read the stories, okay?
- Cloud, well, it makes rain: Google Cloud is rolling in the dough. The business unit just topped Wall Street expectations with a whopping 28% gain, which made it rain because of insatiable demand for artificial intelligence tools powered by cloud infrastructure.
- It’s all “go to”… Nooooo, not like that!: Welcome to one other episode of Autopilot Antics featuring Tesla and the National Highway Traffic Safety Administration (NHTSA)! After a thrilling investigation into a whole lot of crashes in which drivers treated Autopilot like an experienced chauffeur relatively than an assistance system, NHTSA closed the case with 13 tragic and deadly twists.
- I’m just completing this a part of the newsletter: I mean iPading. Just when you thought Apple might have had enough of shiny product announcements, they sneakily planned one other event. Rumor has it that we’ll be getting a latest iPad Pro and Air, in addition to an updated Apple Pencil and keyboard case combo. I’ll be there reporting with the hardware team – stay tuned.
- The soup is terrible and the portions are small (ehm): Meta’s latest AI chatbot, Llama 3, has been released to the world. It’s like a guest at a party who returns random web search results with nothing in particular standing out. But hey, it’s free!
- I wish this was around when I used to be learning English: Google proves once again that it is not just for stalking ex-partners and settling bar trivia debates. They’re testing a latest feature called “Speaking Practice” that uses artificial intelligence to help users converse in English, and no, it doesn’t involve talking about the weather or asking where the library is.