Startups Weekly: Musk raises $6B for AI and the fintech dominoes are falling | TechCrunch


Welcome to Startups Weekly — Haje‘s weekly recap of everything you can’t miss from the world of startups. Join right here to get it in your inbox each Friday.

In a twist that shocks completely nobody and thrills pyromaniacs who love seeing cash burn, Elon Musk’s latest enterprise, xAI, has snagged an informal $6 billion in funding. Valor, a16z, and Sequoia are stacking the cash on the xAI-shaped roulette desk, with Musk spinning the wheel.

Ivan ponders whether or not Musk’s newest market stab will lastly convey us an AI so superior, our puny human brains might be much more out of date than they already are due to his different wild initiatives.

I believe it’s utterly bonkers. These buyers appear to overflow with money and are recent out of skepticism. I can solely think about the pitch: “Picture an AI so powerful, it makes HAL 9000 look like a Roomba.” And, naturally, they threw cash at it. As a result of, effectively … Actually, I can’t see the logic.

What makes this notably nuts is that the $6 billion bonanza is simply the most recent chapter in Musk’s epic saga of “how to get the world to fund my sci-fi fantasies.” The extra tales that come out about Musk, the extra you’d suppose individuals would begin to hesitate earlier than investing. However apparently, because of this I’m a publication author and podcast host (we talked about this on Fairness in the present day as effectively) and never a VC. I’d suppose twice earlier than betting on the man who gave us self-driving vehicles that fail to see fireplace vans and spacecraft that generally land but additionally generally explode in a fiery spectacle.

Right this moment is your final day to save lots of as much as $800 in your Disrupt cross. E-book your early-bird cross by 11:59 p.m. PT tonight!

Most fascinating startup tales from the week

Welcome to the Wild, Wild West of fintech! Do not forget that brilliant shiny star known as Synapse? Yeah, it supernova’d. The banking-as-a-service startup was a phase that gave the impression to be careening towards the stratosphere, and Synapse itself was backed by a16z — however that didn’t assist any. The firm collapsed quicker than my New 12 months’s resolutions. With 10 million shoppers now left within the lurch and lots of fintechs scrambling to select up the items, it’s a full-blown disaster on the market. It’s like “Game of Thrones” however with extra spreadsheets and fewer dragons. In case you thought your week was tough, spare a thought for these caught making an attempt to entry their funds or save their jobs due to this mess. Buckle up — it is going to be a bumpy journey forward for fintech!

  • Drama rides a bike: James Khatiblou, the 37-year-old proprietor and CEO of Onyx Motorbikes, handed away simply as his firm was circling the drain. With unpaid payments, an AWOL COO, offended clients demanding refunds for delayed e-bikes from China, and two former shareholders battling for management over Onyx’s remaining belongings … This can be a hell of a journey.
  • Job cuts in automotive land: Lucid Motors is trimming the fats but once more, shedding 400 workers (6% of its workforce) simply in time for the launch of their first SUV. Apparently, they should “optimize resources.” CEO Peter Rawlinson believes a decrease headcount will assist ship the world’s greatest SUV … In the meantime, Fisker has laid off tons of in a determined bid for survival. Workers received the trace once they have been all of the sudden informed to work at home — presumably so nobody may hear the collective sighs of despair throughout the all-hands assembly.
  • Elevating money to save lots of money: Relay simply pulled off a $32.2 million Collection B funding spherical to assist small companies do extra than simply nervously refresh their financial institution balances. Their secret sauce? Specializing in the mom-and-pop outlets fairly than tech startups — take that, Silicon Valley!
Synapse powered a ton of different startups. Till it didn’t.
Picture Credit: Synapse

Most fascinating fundraises this week

Firefly, the cloud asset administration startup that’s all about simplifying your digital chaos with “infrastructure as code,” has snagged $23 million in funding. This comes after an unimaginable tragedy — co-founder CTO Joseph “Sefi” Genis was killed by Hamas at a music pageant. Regardless of this, Firefly’s workforce selected resilience over retreat and continued to develop their income fourfold in 2023. So principally, Firefly is now untangling cloud complexities and navigating by real-world turmoil like absolute champs.

  • That’s flippin’ nice: Google simply dropped an informal $350 million into Flipkart, making it the most recent VIP to again the Indian e-commerce powerhouse, which now has a valuation of $36 billion.
  • You get a dinero! You get a dinero!: Sending a reimbursement house simply received an entire lot chattier! Félix Pago, the fintech darling that’s making remittances as simple as sending a WhatsApp, simply snagged $15.5 million in funding. Overlook downloading apps or navigating complicated interfaces; this startup is utilizing WhatsApp’s chatbot.
  • A dictionary with a unicorn horn: Extra funding is being poured into startups targeted on AI. DeepL, which builds automated textual content translation and writing instruments that compete towards the likes of Google Translate and Grammarly raised a further $300 million. It’s now valued at $2 billion.
GettyImages 1235830811 1
Picture Credit: Anindito Mukherjee / Bloomberg / Getty Pictures

Different unmissable TechCrunch tales…

Dreaming of tech IPO bonanzas in 2024? Effectively, get up and odor the elevated rates of interest! Regardless of Reddit, Astera Labs, Ibotta, and Rubrik managing to squeeze by the IPO door earlier this 12 months, it appears to be like like most startups are nonetheless caught at house of their PJs. Plaid’s CEO declared they’re staying non-public for now, and Figma and Stripe are busy with tender provides like they’re internet hosting a bake sale as a substitute of prepping for an IPO. Databricks raised $500 million however isn’t feeling the general public market vibes both; possibly subsequent 12 months they’ll really feel extra extroverted. And Canva? They could take so lengthy to go public that we’ll be designing newsletters instantly from our mind implants by then. Keep tuned as TechCrunch continues to monitor which startups will courageous the inventory market runway or keep hidden behind their enterprise capital curtains!

Extra high tales:

  • What’s occurring in messenger land: Meredith Whittaker, the president of Sign, has had it as much as right here with tech trade “frat boys” and their “dorm room high jinks.” At VivaTech in Paris, she didn’t maintain again on her issues about the whole lot from AI energy grabs by U.S. firms to the EU’s misguided makes an attempt at regulation.
  • AI in your ears: Welcome to the battle of generative AI devices, now that includes Iyo’s GenAI earbuds! Humane and Rabbit R1 flopped tougher than a fish out of water, however Iyo thinks it might probably succeed the place they stumbled. Not like its predecessors’ weird lapel pins and overpriced handhelds that critics mentioned ought to’ve simply been apps, Iyo is betting on an already beloved type issue: Bluetooth earbuds.
  • Dude, the place’s my pockets?: Is it a chicken? Is it a airplane? No, it’s the Ledger Stax, lastly descending from the crypto heavens 18 months after its grand announcement. This new high-end {hardware} pockets options an E Ink show designed by iPod guru Tony Fadell — sure, they’re bringing again e-reader vibes to your crypto wants.
  • Wait, Foursquare had 105 workers to put off?: Foursquare simply gave 105 workers the boot in a bid to “streamline” operations and put itself on firmer monetary footing. CEO Gary Little, who would possibly as effectively have hit ship after which vanished into skinny air, didn’t shed a lot gentle on what comes subsequent.
  • Let me summarize that for you: It appears to be like like Apple is again to its outdated tips, able to “sherlock” one other modern app function. This time, it’s The Browser Firm’s Arc that’s within the crosshairs with its snazzy AI summarization instruments like “browse for me” and “pinch to summarize.” Apple’s rumored “smart recaps” in iOS 18 sound suspiciously related, doubtlessly turning Safari right into a one-stop store for AI-powered summaries of the whole lot from net pages to missed notifications.

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