San Francisco-based Magic, which develops AI models to write software, is reportedly in talks with investors to raise a fresh $200 million.

The raise would come at a $1.5 billion valuation — triple its previous valuation from just five months ago — per a Reuters report. Magic has no revenue and no product for sale, the report says.

The startup last raised a $117 million round in February led by NFDG Ventures, which also included participation from CapitalG and Elad Gil.

Investors in the new round would include Jane Street Capital, according to the report.

Hot sector

While everything in AI is hot, software development seems to be something investors have specifically keyed in on when exploring the best near-term uses for the tech.

Not only does AI hold the promise to speed up application and software development, but also could cut down the cost of software developers — as well as the problem of just finding them to hire in the first place. It could also possibly make them more productive.

Other startups that have raised cash in the space include London-based Builder.ai, which raised a $250 million-plus Series D led by Qatar Investment Authority last year.

Earlier this year, Palo Alto, California-based Augment locked up a $227 million Series B round at a $977 million post-money valuation. Augment helps developers and software teams by giving them AI coding assistance.

That same week, San Francisco-based Cognition reportedly locked up a $175 million investment led by Founders Fund at a $2 billion valuation. The 6-month-old startup has developed an artificial intelligence-powered coding assistant called Devin.

Founded in 2022, Magic has raised $145 million, per Crunchbase.

Related reading:

• Eye On AI: OpenAI Goes On A Buying Spree As AI Looks To Open Up M&A, IPO Markets

Illustration: Dom Guzman

Streamline operational efficiency

I have mentioned it before: I don’t think AI will replace people, but people who don’t use AI will be replaced by those who do. It’s about being 10x more efficient utilizing technology. Sometimes 80% of what we actually need is automation tools and 20% can be actual AI. For example, when looking at customer support, well-trained chatbots can manage basic customer requests allowing the existing staff to handle 10x more tickets.

Adopting flexible work models is not just a trend; it’s a practical move. Encouraging some remote work can significantly cut down on office space costs. I do also believe in the personal connection that cannot be replaced with Slack or Zoom, however, a good mix can reduce costs without damaging quality of service. Keep in mind that most employees value such a working environment.

Optimize marketing and sales expenditures

Smart spending in marketing can yield big savings and better results.

Start with leveraging digital marketing channels such as SEO, content marketing and social media. These channels offer cost-effective ways to reach your audience. Tools like Google Analytics can track performance, helping you refine your strategies for maximum impact.

A/B testing is crucial for optimizing marketing efforts. Test different headlines, images and calls-to-action to find what resonates most with your audience, ensuring you get the best return on your investment. Additionally, customer segmentation helps tailor marketing strategies to those more likely to convert and spend more. Platforms like Salesforce 1 or HubSpot can streamline the process by targeting high-value segments effectively.

Consider account-based marketing for high-value prospects. This personalized approach can enhance engagement and conversion rates. Tools like Marketo can help execute these strategies efficiently. And always use data to allocate your budget where it will have the most impact, like email marketing and retargeting ads.

Enhance R&D and product development efficiency

Besides the basic agile development practices, try focusing on the core features requested by actual customers. It is crucial to validate market demand.

This approach saves resources and ensures you’re developing products that meet real customer needs. Engage directly with customers to gather insights and prioritize development efforts that deliver the most value. Learn to say no to customers who request custom features that are not in demand by a larger audience. Saying yes to any request to avoid customer churn will drain your resources with no justifiable return and will confuse your team about the product roadmap.

By implementing these strategies, tech companies can effectively reduce costs while maintaining high-quality standards, paving the way for sustainable growth and profitability. It’s all about working smarter and focusing on what truly drives value.

Itay Sagie is a strategic adviser to tech companies and investors, specializing in strategy, growth and M&A, a guest contributor to Crunchbase News, and a seasoned lecturer. You can connect with him on LinkedIn for further insights and discussions.

Illustration: Dom Guzman

“The idea that you could actually bring automation and more due diligence to the seed stage was not common,” said Holiday.

The co-founders had prior experience that led them to this thesis. Holiday, a software engineer in equities trading at Goldman Sachs, brought those skills to the venture. Okike spent nine years at Insight Partners and saw the value from Insights’s Onsite team supporting portfolio companies with growth efforts.

“One of my learnings [at Insight] was that a really good platform team can be very valuable, not only in winning deals, but helping companies post-investment,” said Okike, referring to the firm’s in-house software developers.

645 Ventures’ first fund was a scrappy $8 million seed round announced in 2014. In late 2022 the firm raised its largest funds ever with $350 million across two;  a $195 million fourth flagship fund and a select fund of $153 million.

Seed- and early-stage venture is a network-driven business. However, what differentiates 645 Ventures is that it has also built its own software to source investments at the seed stage.

On its outbound process, reaching out to companies directly, Okike had this to say.

“We’ve also built the outbound deal-sourcing model. And that’s something that’s pretty unique for our stage,” said Okike. “There are ways for us to show the founder how we can help. And it’s also a way to figure out how good those founders are, because if they go and pitch one of those companies, and it becomes a customer, you have a sense of the quality of the product as well as their sales ability. So it’s informal due diligence.”

The research-focused investment team reviews thousands of companies every month, looking at companies that have traction, often in sectors overlooked by venture.

Getting to A

“We pretty much brought growth-equity practices and due diligence to the early stage — which lowered our loss ratio,” said Holiday.

“We have models around what makes a great founding team or what makes a great market, or what qualities of product you should be looking for with exceptional companies at the seed stage, and we try to quantify that as much as possible,” said Okike.

The firm claims that over 50% of its portfolio investments at seed get to Series A.

“If a bigger percentage of your businesses don’t fail before Series A, you just have more chances to return the fund business over time,” said Okike.

As the market has returned to capital-efficient growth in recent years, several portfolio companies with steady  revenue growth were acquired, said Holiday. These  include real estate management platform Aryeo acquired by Zillow, direct-to-consumer mattress seller Resident by Ashley HomeStore, identity threat company Oort by Cisco, and property intelligence platform Betterview acquired by Nearmap.

Portfolio company FiscalNote, a government data and analytics company, went public via a SPAC listing in August 2022. (Its value is down significantly from its listing of $1.3 billion.)

645 Ventures plans to invest in 30 companies from its fourth fund. Each fund is typically invested over a three- to four-year period, with follow-on over a longer period. For the select fund, 80% will be invested in its best performing companies.

In the past year, 645 Ventures has built out its organization. The firm has 21 team members across its New York and San Francisco office with a combined research and investment team, a success team, an engineering team and investor relations.

“We like to say our model is software systems and human systems working together,” said Okike.

Crunchbase Pro list:

• 645 Ventures Portfolio Companies

Illustration: Dom Guzman

The firm describes the vehicle as a “hybrid fund” as it will make commitments to venture and seed investors, back rounds for individual startups, and buy stakes in early-stage funds from existing shareholders.

Although Industry Ventures is best known as a secondary investor, it’s been pursuing this hybrid strategy since 2009. In that time, managing director Roland Reynolds, has seen his share of market cycles for emerging managers looking to raise new funds.

The current climate, he observed, is sharply different than it was a couple years ago.

“This is a much more challenging fundraising environment,” Reynolds said. “To get a flat or slightly larger fund size is a big win.”

AI pitches in

But while investment capital is tighter, Reynolds said he’s optimistic that those who do manage to close funds will go on to post stronger-than-usual returns. That’s partly due to the rise of AI-enabled business models, although Industry Ventures has been pretty active across a variety of tech sectors.

Recent investments range from robotics to enterprise software. In April, for instance, Industry Ventures participated in a $100 million Series B for Collaborative Robotics, a developer of workplace robots. The firm also led a $50 million Series B for Coalesce Automation, which develops data management software.

Going forward, the firm plans to allocate about 40% of the new fund into emerging managers of early-stage funds that are typically $250 million or less. Another 40% will go to direct investments in startups, usually at around Series B.

The remaining 20% of the capital will go to buy stakes in mostly early-stage funds from institutional investors such as  endowments and family offices who are seeking liquidity or to exit the asset class. Industry Ventures typically buys stakes in venture and seed funds that started investing between three and five years ago, with the expectation that it will likely take many more years to produce sizable exits.

With the latest fundraise, the firm now has more than $8 billion in committed capital under management. Of that, $2.3 billion is earmarked for early-stage hybrid funds that focus on U.S. companies and managers.

Illustration: Dom Guzman

Lots of big rounds last month, including two huge ones well over a half-billion dollars. While June started slow, it ended in a flurry of massive-money deals — making this list tough to crack.

1. Cruise, $850M, autonomous cars: In for a penny, in for a pound. That clearly seems to be how General Motors feels about Cruise. The auto giant agreed to pump another $850 million into the San Francisco-based startup. Cruise’s saga has been well documented. In 2021, Cruise snagged the largest round of any venture-backed U.S. startup when it upsized a round to $2.75 billion, valuing the company at  more than $30 billion. However, the tide started to turn in early 2022 when SoftBank did not release a promised $1.35 billion to Cruise as part of an agreed-upon deal when the autonomous carmaker completed a commercial deployment of vehicles. Instead, General Motors acquired SoftBank’s equity ownership stake in Cruise for $2.1 billion. Then, late last year, Cruise suspended its self-driving taxi program across the country after losing its permit to operate in San Francisco due to an incident with a pedestrian. That announcement came almost exactly a year after another autonomous vehicle startup — Ford Motor-backed Argo AI — shuttered after raising $3.6 billion in funding from investors such as Ford Motor, Volkswagen Group and Lyft. Cruise is now restarting its driving programs in Phoenix, Dallas and Houston. Clearly GM is betting — big — the autonomous driving and robotaxi market comes back.

2. AlphaSense, $650M, artificial intelligence: AI-driven market intelligence platform AlphaSense raised $650 million in funding co-led by Viking Global Investors and BDT & MSD Partners at a $4 billion valuation — a 75% increase from just nine months ago. As part of the deal, AlphaSense acquired expert research startup Tegus for $930 million. Last September, the company locked up a $150 million Series E led by Bond Capital at a $2.5 billion valuation — an increase of nearly 30% from its $100 million round at a $1.8 billion valuation in April last year. The New York-based startup’s market intelligence and search platform — powered by AI and natural language processing — helps clients form corporate and investment strategies. In total, the company has now raised $1.4 billion since its founding, per Crunchbase.

3. Sila Nanotechnologies, $375M battery: A next-generation battery materials company pulled in a huge round in June. Alameda, California-based Sila, a next-generation battery materials company, announced it raised a $375 million Series G led by existing investors Sutter Hill Ventures and funds and accounts advised by T. Rowe Price Associates. The new cash will help the  company finish construction of its Moses Lake, Washington, plant — scheduled for the first quarter of next year — for the production of its Titan Silicon anode material. Founded in 2011, the company has raised $1.4 billion, per Crunchbase.

4. Formation Bio, $372M, biotech: Formation Bio, an AI-enhanced pharma company, raised a $372 million Series D led by a16z. The New York-based startup, launched in 2016 as TrialSpark, has built AI-enabled platforms and processes to accelerate drug development and clinical trials — integrating large language models, AI models and applications throughout its platform. More and more biotech startups are using AI to help with their drug processes and investors are clearly taking note. Founded in 2013, the company has raised $528 million, per Crunchbase.

5. CData Software, $350M, data integration: In a round that likely slipped under most folks’ radar was data connectivity company CData Software’s massive $350 million growth round from two big-named firms. The round was led by Warburg Pincus, with participation from Accel. The Chapel Hill, North Carolina-based company develops data products and connectivity solutions that provide access to live data from hundreds of on-premises and cloud applications. Founded in 2016, the company has raised $510 million, per Crunchbase.

6. (tied) Creatio, $200M, customer relationship management: Low-code and no-code startups are not seeing the funding they did a couple of years ago, but it clearly has not dried up completely. Creatio achieved unicorn status after landing a $200 million round led by Sapphire Ventures. The new cash, a minority investment, values the startup at $1.2 billion and will be used to help the company expand globally as it continues to grow revenue 50% year to year. The Boston-based startup is a developer of a no-code platform to automate customer relationship management and enterprise workflows. Not surprisingly, the company has an AI angle — creating a new generative AI copilot to help automate different marketing and sales tasks. Founded in 2014, Creatio previously raised $68 million in 2021 in a round led by Volition Capital, per Crunchbase.

6. (tied) Foodsmart, $200M, healthcare: Foodsmart locked down a massive $200 million round led by TPG’s global impact investing platform, The Rise Fund. The San Francisco-based company has developed a telenutrition and food benefits management platform. Founded in 2010, Foodsmart helps those facing chronic disease and food insecurity by partnering with health plans and providers to give patients access to affordable healthy eating options, virtual nutrition counseling, meal plannning and ways to buy food affordably. Foodsmart has raised nearly $315 million, per Crunchbase.

8. Marea Therapeutics, $190M, biotech: This big biotech round is actually the combination of two rounds. Marea Therapeutics, a clinical-stage biotechnology company developing medicines for cardiometabolic diseases, launched with $190 million in a combined Series A and B financing. The Series A round was led by Third Rock Ventures — where the startup was incubated — and the Series B round was co-led by Forbion Capital Partners, Perceptive Advisors, Sofinnova Investments and VenBio Partners. The company didn’t split out the rounds, so we record it as one.

9. Sidecar Health, $165M, healthcare: Healthcare is a mess — nearly everyone can agree on that. Sidecar Health, a health insurance company providing major medical coverage to businesses, closed a $165 million Series D led by Koch Disruptive Technologies to try to untangle it at least a little bit. The El Segundo, California-based startup offers plans that eliminates the need for prior authorizations, referrals and networks for doctors — allowing patients to go where they want. Sidecar Health believes a free-market approach will ensure healthcare is more accessible and affordable. Founded in 2018, the company has raised 328 million, per Crunchbase.

10. Huntress, $150M, cybersecurity: Maryland-based Huntress became the newest cybersecurity unicorn after it raised a $150 million Series D at a $1.5 billion-plus valuation. The new round was led by Kleiner Perkins, Meritech Capital Partners and existing investor Sapphire Ventures. The startup focuses on security services for small business to small enterprise customers — an often overlooked sector in cyber as many companies chase Fortune 500 companies. Huntress currently is realizing more than 70% year-to-year revenue growth for the past two years as it continues to “approach $100 million in annual recurring revenue.” Founded in 2015, Huntress has raised nearly $310 million, per Crunchbase.

Big global deals

While Cruise’s raise was the largest globally for the month, the secondest largest came from Asia

• Indian grocery delivery startup Zepto raised a $665 million round, doubling its valuation to $3.6 billion.

Methodology

We tracked the largest rounds in the Crunchbase database that were raised by U.S.-based companies for the month of June 2024. Although most announced rounds are represented in the database, there could be a small time lag as some rounds are reported late in the month.

Illustration: Dom Guzman

This is a weekly feature that runs down the week’s top 10 announced funding rounds in the U.S. Check out last week’s biggest funding rounds here.

It was a huge week for startups raising big. A company had to raise nine figures to make the list this week and five raised $200 million or more. It’s unlikely the short week next week will see these kinds of rounds, so don’t expect the same type of dollar figures in the next seven days.

1. Sila Nanotechnologies, $375M battery: A next-generation battery materials company led the way this week with a huge round. Alameda, California-based Sila, a next-generation battery materials company, announced it raised a $375 million Series G led by existing investors Sutter Hill Ventures and funds and accounts advised by T. Rowe Price Associates. The new cash will help the  company finish construction of its Moses Lake, Washington, plant — scheduled for the first quarter of next year — for the production of its Titan Silicon anode material. Founded in 2011, the company has raised $1.4 billion, per Crunchbase.

2. Formation Bio, $372M, biotech: Every week there is a big biotech raise and this week’s is really big. Formation Bio, an AI-enhanced pharma company, raised a $372 million Series D led by a16z. The New York-based startup, launched in 2016 as TrialSpark, has built AI-enabled platforms and processes to accelerate drug development and clinical trials — integrating large language models, AI models and applications throughout its platform. More and more biotech startups are using AI to help with their drug processes and investors are clearly taking note. Founded in 2013, the company has raised $528 million, per Crunchbase.

3. CData Software, $350M, data integration: A round that likely skipped under most folks’ radar was data connectivity company CData Software’s massive $350 million growth round from two big-named firms. The round was led by Warburg Pincus, with participation from Accel. The Chapel Hill, North Carolina-based company develops data products and connectivity solutions that provide access to live data from hundreds of on-premises and cloud applications. Founded in 2016, the company has raised $510 million, per Crunchbase.

4. (tied) Creatio, $200M, customer relationship management: Low-code and no-code startups are not seeing the funding they did a couple of years ago, but it clearly has not dried up completely. Creatio achieved unicorn status after landing a $200 million round led by Sapphire Ventures. The new cash, a minority investment, values the startup at $1.2 billion and will be used to help the company expand globally as it continues to grow revenue 50% year to year. The Boston-based startup is a developer of a no-code platform to automate customer relationship management and enterprise workflows. Not surprisingly, the company has an AI angle — creating a new generative AI copilot to help automate different marketing and sales tasks. Founded in 2014, Creatio previously raised $68 million in 2021 in a round led by Volition Capital, per Crunchbase.

4. (tied) Foodsmart, $200M, healthcare: Foodsmart locked down a massive $200 million round led by TPG’s global impact investing platform, The Rise Fund. The San Francisco-based company has developed a telenutrition and food benefits management platform. Founded in 2010, Foodsmart helps those facing chronic disease and food insecurity by partnering with health plans and providers to give patients access to affordable healthy eating options, virtual nutrition counseling and meal plans. Foodsmart has raised nearly $315 million, per Crunchbase.

6. Sidecar Health, $165M, healthcare: Healthcare is a mess — nearly everyone can agree on that. Sidecar Health, a health insurance company providing major medical coverage to businesses, closed a $165 million Series D led by Koch Disruptive Technologies to try to untangle it at least a little bit. The El Segundo, California-based startup offers plans that eliminate the need for prior authorizations, referrals and networks for doctors — allowing patients to go where they want. Sidecar Health believes a free-market approach will ensure healthcare is more accessible and affordable. Founded in 2018, the company has raised $328 million, per Crunchbase.

7. EvolutionaryScale, $142M, biotech: It was a big week for biotech. New York-based EvolutionaryScale, which has developed a large language model for creating novel proteins, raised a $142 million seed funding, led by Daniel Gross, Lux Capital and Nat Friedman. Amazon Web Services and NVentures, the venture capital arm of Nvidia, also took part in the round. While the company’s AI can be used for accelerating drug discovery, it also believes it can be used for other other applications such as breaking down plastics.

8. Etched.ai, $120M, semiconductor: Etched.ai became the latest startup to ride the wave of investor enthusiasm for AI chips. The San Francisco-based startup locked up a $120 million round led by Positive Sum and Primary Venture Partners. The startup is the creator of the transformer-specialized AI chip Sohu, used to train and deploy large language models that are the underpinning of generative AI. Etched has announced a partnership with Taiwan Semiconductor Manufacturing Co. to produce the chip, which will be a direct competitor to chip giant Nvidia — which dominates the market in AI. However, the large energy consumption of AI remains a concern, and Etched believes it can provide a more cost-effective and energy-efficient chip that is faster.

9. Bright Machines, $106M, manufacturing: San Francisco-based Bright Machines, a developer of software-defined manufacturing, raised $126 million in a Series C funding — with $106 million in equity led by investment from funds and accounts managed by BlackRock. Founded in 2018, Bright Machines has raised more than $400 million, per the company.

10. (tied) Hebbia, $100M, artificial intelligence: New York-based Hebbia, a startup using generative AI to search large documents and find answers, raised nearly $100 million in a Series B led by Andreessen Horowitz. Founded in 2020, the company has raised more than $130 million, per Crunchbase.

10. (tied) LanzaJet, $100M, fuel: Chicago-based LanzaJet, a sustainable fuels technology company, announced a $100 million growth equity round. Investors included Mitsubishi UFG Financial.

Big global deals

There were a few big rounds outside the U.S. this week. The largest was:

• Turkey-based Getir, which provides on-demand delivery services, raised a $250 million venture round.

Methodology

We tracked the largest announced rounds in the Crunchbase database that were raised by U.S.-based companies for the seven-day period of June 22 to June 28. Although most announced rounds are represented in the database, there could be a small time lag as some rounds are reported late in the week.

Illustration: Dom Guzman

Summer is here and the time is right to maybe read a little less tech news and have some fun.

If that’s the case, you may have missed some intriguing capital raises this month. No worries, we have you covered with what caught our eye — starting with an eye-related startup.

Check your eyes

Usually when we talk about healthcare and AI, it relates to a biotech using the technology to refine therapeutics or help with the clinical trial process.

However, Eyebot locked up $6 million this month led by AlleyCorp and Ubiquity Ventures for a different business model. The Boston-based startup is looking to build out a network of AI-powered kiosks that provide 90-second vision exams

Yes, self-serve, rapid eye tests with no optometrist. Hey, we scan our own groceries, why not be your own eye doctor? The prescription the kiosk spits out actually is finalized by a teledoctor, but it still eliminates the need for a traditional eye appointment — which might be good considering the optometry labor shortage.

The startup is looking to roll out its kiosks — which look like old-school arcade machines — in places such as shopping centers and pharmacies in October in the Northeast before scaling next year.

Keep an eye out!

Voice clues

Now moving from seeing to speaking, Canary Speech is next on the list after it raised a $13 million Series A funding round led by Cortes Capital.

The Provo, Utah-based AI-powered voice biomarker healthtech startup uses patented vocal analysis to screen for mental health and neurological disorders.

Canary’s vocal biomarker tech can actually capture and analyze speech data within seconds to identify irregularities in behavioral and cognitive changes — besting current clinical screening standards and before experiencing noticeable symptoms for illnesses like anxiety, depression and dementia.

Canary’s ambient listening tools can not only assess a patient’s health, but also simultaneously evaluate physicians’ health — something more important than ever with the American Medical Association reporting that at the end of 2021 nearly 63% of physicians experienced symptoms of burnout.

AI for social media

Ever been lonely on social media and needed a friend?

Well, now you can just create one — or at least an AI one.

Butterflies.AI locked up a $4.8 million seed round led by Coatue In June. The Bellevue, Washington-based startup is creating a social media platform where humans and AI can “co-exist,” by letting users create AI friends.

The platform relies on AI models to help users create a new “friend” in just minutes. The AI persona’s are fully fleshed out with a profile, backstory and even emotions. They then can create and interact with other people and AI personas on the platform.

To be honest, we don’t completely get the idea. Isn’t the point of social media to argue with people who don’t think like you? Not to make/create friends.

Moving outside the echo chamber

How people digest news and where they get their information from is something that has evolved significantly in just the last decades.

Many news outlets are gone and newspapers are all but dead. People seem very happy to get their news delivered only in the way they want with the opinions they share.

That’s why news-reader startup Particle.News caught our eye this month. The Northern California-based startup is looking for partnerships with publishers where its AI wouldn’t merely summarize the news, but actually help the reader look deeper into stories and understand different angles by using artificial intelligence to summarize stories from a variety of publishers.

The business model received some notice from investors this month, locking up a $10.9 million Series A led by Lightspeed Venture Partners.

It also signed a deal with Reuters to be a source of news content for its service.

It’ll be interesting to see where this goes. Many are under the impression people just want to read the news in their own echo chamber. Perhaps there’s more to it.

It’s (not) a tire fire

We’ve all driven past a tire yard, with all that used rubber just creating an eyesore.

Well, LDCarbon locked up $28 million in a Series C to help deal with just that. The new round was led by Toyota’s growth fund, Woven Capital.

The Seoul, South Korea-based company has developed technologies to recycle end-of-life tires and other automotive parts into recovered carbon black and pyrolysis oil.

Those products, in turn, can be used to create new automotive parts and tires — and the cycle continues. The company is trying to solve  a major pollution issue that comes from incinerating old cars and tires — while also helping automakers hit sustainability goals and regulatory requirements.

The company is in the process of building Asia’s largest tire pyrolysis plant, and says its pyrolysis and material recovery process provides nearly 100% recovery of waste tires.

Illustration: Dom Guzman

It may be the big funding rounds that grab the headlines when it comes to the startup world, but for investors it’s the exit that actually matters.

For the past few years the M&A market for startups has been slow — and the IPO pipeline nonexistent.

However, just as AI is taking over venture, perhaps it is doing that for the M&A and IPO markets.

OpenAI — which reportedly has doubled annualized revenue to $3.4 billion — opened up its wallet the past few days to make two deals happen. The creator of ChatGPT first bought search and analytics startup Rockset last week. The San Mateo, California-based company had raised nearly $118 million in capital, per Crunchbase. Terms of the deal were not disclosed.

Then just this week, the AI giant bought video collaboration startup Multi, previously Remotion, in what was reportedly an acqui-hire. The San Francisco-based company had raised $13 million to date, per Crunchbase.

Overall, M&A has picked up slightly involving startups, per Crunchbase data. The current quarter already has witnessed more activity than Q1, with more than 430 deals. However, those numbers are still relatively low compared to quarters in previous years.

While those two deals will not set fire to the M&A market, it doubled the amount of deals OpenAI had previously done according to Crunchbase. It may show a new willingness for inorganic growth, a desire nearly all Big Tech companies must gain as they get larger. With OpenAI’s ever-expanding revenue numbers and the value of the company ever increasing, it certainly has the wherewithal to easily become a Goliath among suitors.

However, M&A is not the only way to exit, and AI may be looking to help there too. Last week, artificial intelligence chips startup Cerebras Systems reportedly filed confidentially for an initial public offering.

It’s a good time to be an AI chip developer. Nvidia has become one of the most — if not the most — valuable companies in the world and funding is currently gaining traction in the sector. Astera Labs — which provides data and memory connectivity solutions for some of the biggest chipmakers in the world — had a successful IPO even though its shares have tailed off its highs.

Other companies that went public this year had strong AI ties — like biotech Tempus AI — or played up their AI connections strongly — like Reddit.

Public investors are clearly intrigued by the AI tech play and where it may lead.

Investors have waited a couple years for the IPO and M&A markets to open back up, and it would not be surprising for AI to lead that charge — just as it seems to be leading everything else.

If big AI companies like OpenAI and perhaps Nvidia — which is showing interest in taking on the cloud services providers — start to get acquisitive and more startups think the time is right to test the public market, investors may start to see those long-awaited returns rolling in.

Things that caught our eye and other stuff:

• The soap opera at Stability AI took another turn this week, as investors that included ex-Facebook President Sean Parker committed $80 million to take over the artificial intelligence-driven visual art startup. Per a story in The Wall Street Journal, the new investors made a deal with suppliers to forgive some $100 million owed by Stability and also negotiated for the startup to be released from $300 million in future obligations. It’s the latest twist for Stability, which locked up a $101 million raise led by Coatue, Lightspeed Venture Partners and O’Shaughnessy Ventures in 2022. The company did not release a valuation at the time, but Bloomberg reported the new cash infusion valued the company at around $1 billion. However, in spring of last year Forbes reported Stability AI’s founder Emad Mostaque made exaggerated statements about both his own background and his generative AI startup. At the time, some AI researchers disputed the startup’s claims that it created the image generator Stable Diffusion, an open-source project developed by researchers. It also was reported the London-based startup was looking to raise an additional $1 billion of capital at a multibillion-dollar valuation, but talks had stalled. In March, reports surfaced that Mostaque left the company after an investor revolt. The company said in an internal memo it was trying to “right-size” the business after a period of unsustainable growth, per the report. Finally, in April the startup laid off 10% — estimated to be about 20 people — of its workforce, per a report by CNBC. That’s quite the whirlwind — even for an AI startup.
• Another round that caught our attention this week was raised by a Palo Alto, California-based startup. MEandMine, a developer of AI-flagging to identify psychological risks in young children, raised $4.5 million in funding led by K5 Global. The startup offers AI-powered screening to identify students’ psychological risks in real time by playing games with data points that are used for AI-flagging, allowing teachers, counselors and others to screen early and make informed decisions. Initial results from its California school pilots show a 91% accuracy, the company says. MEandMine’s algorithm launches games based on individual students’ makeup, and can help them center themselves.

Related Crunchbase Pro list:

• Global Venture-Backed M&A

Related reading:

• Deal-Making Involving VC-Backed Startups Picks Up Slightly, But Still Slow
• Accounting Startup Klarity Books $70M Series B — Report
• AI Chip Startup Etched Captures $120M In Hot Market
• Stability AI Newest Addition To Unicorn Stable
• Stability AI’s Founder Made Misleading Claims — Report
• Stability AI Lays Off 10% Of Staff — Report

Illustration: Dom Guzman

Developers of workplace robots, robotic surgery technologies, and even humanoid models have all raised large rounds in the past six months. The artificial intelligence funding boom has also helped boost the space, with investors backing big deals at the intersection of AI and robotics.

Altogether, robotics startups have pulled in over $4.2 billion in seed through growth-stage financing this year, per Crunchbase data. That puts funding on track to exceed last year’s muted levels, albeit still below its cyclical peak, as illustrated below.

Workplace robots

Where’s the money going? Per Crunchbase data, workplace robotics still accounts for the largest number of rounds, with startups looking to offset the need for human labor for tasks like delivering meals, pulling weeds and moving stuff in warehouses.

Among the largest recipients in this vein is San Francisco-based Bright Machines, a developer of software and robotics technology for factory manufacturing. The company raised $106 million in Series C funding, plus $20 million in debt, in a BlackRock-led financing announced Tuesday.

Another big round went to Silicon Valley-based Collaborative Robotics, which landed a $100 million General Catalyst-led Series B this spring. Its business model centers on building “cobots” or robots that can work alongside humans doing tasks like carrying boxes and moving industrial carts.

On the agtech front, Seattle-based Carbon Robotics has harvested a total of $85 million to date, with its latest funding raised in a May Series C. Its primary offering is an AI-enabled weeding robot that provides farmers a less labor-intensive way to reduce reliance on herbicides.

Redwood City, California-based Bear Robotics, meanwhile, snagged $60 million in an LG Electronics-led financing in March. The company makes a mobile robot capable of carrying trays or packages, which it markets to customers in hospitality, assisted living, warehouse operations and other industries.

Here come the humanoids

We’re also seeing large investments in startups developing humanoid robots — a staple of science fiction that has yet to penetrate everyday reality.

Sunnyvale, California-based Figure, which describes itself as an “AI robotics company bringing a general purpose humanoid to life,” was the biggest draw here, snapping up $675 million in a February Series B. It drew heavy interest from corporate investors, with Nvidia, Microsoft and Amazon among its backers.

1X, a startup with dual headquarters in Norway and Silicon Valley, picked up $98 million in January to further development of its initial humanoid models. This includes NEO, whose human-like body is engineered with muscle-like anatomy, and EVE, a robot which resembles a human but with wheels instead of feet.

Per 1X, the humanoid robot represents the most logical form factor for integrating advanced processing and AI more deeply into the physical world. A research note on its website postulates that: “At its core, our world is designed by and for humans, which makes the human form the most effective means of interfacing with it.”

By and large, it’s still early days envisioning what these AI-powered humanoids might actually accomplish. The startup envisions them making contributions in industries including agriculture, construction and healthcare, with a particular focus on taking on dangerous and repetitive jobs.

Surgical robotics

Surgical robotics has also been a major area for robot-related startup investment over the years, and 2024 is no exception.

The biggest round went to MMI, a developer of technology for robotic-assisted microsurgical procedures that raised $110 million in a February Series C led by Fidelity. The company says its technology lets surgeons replicate movements of the human hand at the micro scale and can expand treatment options for patients needing soft tissue, open surgical procedures.

Most recently, Shanghai-based Ronovo Surgical raised $44 million in a Series B financing announced this month. The company develops a robotic-assisted system for laparoscopic surgeries.

Easy to appeal, harder to prove

Unlike many other startup sectors, founders of robotics companies usually don’t have trouble selling us on why we would want their products. After all, who wouldn’t want a robot to do jobs that are boring, backbreaking, hazardous and time-consuming for humans?

Moreover, as we face lower global population growth rates — particularly in developed economies — there won’t necessarily be enough people willing and able to do the work required to provide and maintain the level of services and infrastructure to which we’re accustomed.

The challenge is all about execution. Will today’s funded startups be capable of delivering on their visions with robotics technologies that are capable in their assigned tasks, scalable and affordable?

It’d certainly be nice to answer in the affirmative. Startup history, however, tells us that for every huge success story, there are usually many more that don’t make it.

Related Crunchbase Pro list:

Further reading:

• Collaborative Robotics Locks Up $100M, Latest Robot Startup To Raise Big
• The Week’s 10 Biggest Funding Rounds: Figure And Ascend Elements Climb To The Top

Illustration: Dom Guzman

Clarification: This story has changed since its original publication.

Creatio achieved unicorn status after landing a $200 million round led by Sapphire Ventures, with participation from StepStone Group and current investors Volition Capital and Horizon Capital.

The new cash, a minority investment, values the startup at $1.2 billion and will be used to help the company expand globally as it continues to grow revenue 50% year to year.

“With this investment, we will continue to disrupt the traditional enterprise software approach, helping our clients to accelerate time-to-value and use technology as a competitive differentiation in their business,” said CEO Katherine Kostereva in a release.

The Boston-based startup is a developer of a no-code platform to automate customer relationship management and enterprise workflows.

More AI

Not surprisingly, the company has an AI angle — creating a new generative AI copilot to help automate different marketing and sales tasks.

Creatio will need to continue to innovate as it competes with huge tech titans such as Salesforce 1, Oracle and SAP which dominate the market.

The no-code and low-code space saw solid growth in 2021-22 as startups like Builder.ai and Genesis Global raised huge nine-figure rounds. While the sector appears to have slowed down, the current generative AI explosion seems to be breathing new life into the industry.

Founded in 2014, Creatio previously raised $68 million in 2021 in a round led by Volition Capital, per Crunchbase.

Illustration: Dom Guzman