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Tag: venture

  • These Gen Zers just raised $11.75M to put Africa’s defense back in the hands of Africans | TechCrunch

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    After five years of building an edtech company, Nathan Nwachuku, 22, realized that Africa was at a crossroads. The continent is undergoing rapid industrialization, he told TechCrunch. There is money, opportunity, and a young, driven population. He figured, soon enough, the continent was on the “edge of an industrial revolution.” 

    “At the same time,” he said, he felt the continent still struggled to address what was one of its biggest Achilles heels. “Terrorism and insecurity.” Africa has more terror-related deaths than any region in the world, and it is this problem that could slow down — or even stop completely — the growth of the region, Nwachuku said. 

    He teamed up with a friend, Maxwell Maduka, 24, and launched Terra Industries, a defense company that designs infrastructure and autonomous systems to help governments and organizations monitor and respond to threats. The company announced Monday that it emerged from stealth with a $11.75 million round led by Joe Lonsdale’s 8VC. 

    Others in the round include Valor Equity Partners, Lux Capital, SV Angel, and Nova Global. The company previously raised an $800,000 pre-seed round, and Nwachuku said others took much interest in the company after it appeared on CNN. African investors in the company include Tofino Capital, Kaleo Ventures, and DFS Lab. 

    “The goal is to build Africa’s first defense prime, to build autonomous defense systems and other systems to protect our critical infrastructure and resources from armed attacks,” Nwachuku, the company’s CEO, said. Maduka serves as the company’s CTO. 

    The team is stacked with military experience: 40% of its engineers held the same role in the Nigerian military; 8VC’s Alex Moore, who specializes in defense investing, is also on the board, and Nigeria’s Vice Air Marshal Ayo Jolasinmi serves as an advisor. Maduka also served as an enginner in the Nigerian Navy and founded a drone company at 19.

    The company, based in Nigeria’s capital, Abuja, took a multi-domain approach to product development, considering how to protect critical infrastructure from the ground, water, and air. For the air, the company produces long-range and short-range drones. On the ground, it has surveillance towers and ground drones. The company is still working on developing maritime technology to help protect infrastructure such as offshore rigs and underwater pipelines. 

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    Terra powers its tech with its proprietary software, ArtemisOS, which collects, analyzes, and synthesizes data in real time. Once threats are spotted, they alert response forces (such as security agencies) so they can intercept them. “We want to geofence all of Africa’s critical infrastructure and resources,” Nwachuku said, adding that the problem is not lack of firepower (many African armies already have that).

    Instead, it’s a lack of sovereign intelligence, as much of the intelligence that African countries depend on comes from Western powers, China, and Russia. 

    “We want to take the defense of our continent’s resources and infrastructure into Africa’s own hands,” Nwachuku continued. “We are the first truly Pan-African defense company.” 

    Terra recently won its first federal contract, though it said it cannot provide more details. The company makes money when governments and commercial customers place orders for Terra systems and then pay an annual fee for data processing and storage. Nwachuku said the company has generated more than $2.5 million in commercial revenue so far and is protecting assets valued at around $11 billion. 

    Commercial revenue comes from protecting private infrastructure, like gold mines or power plants. Terra said it is protecting at least two hydro power plants and several smaller mines, with most of the company’s clientele coming from Nigeria. 

    The company hopes to use the fresh capital to help expand and build more defense factories across Africa. It also wants to further expand its software capabilities and grow its AI team. It will open software offices in San Francisco and London, but the company said manufacturing will remain in Africa, with more factories opening across the continent to boost job creation. 

    “It’s clear Africa today is undergoing what I see as an epic struggle for its very survival,” Nwachuku said. “The only way for us to truly break ourselves from the shackles that have held us back for the last decade or two is ensuring the core resources, the core infrastructures of the continent, are entirely protected.”

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  • Insight Partners sued by former vice president Kate Lowry | TechCrunch

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    Kate Lowry, a former vice president at Insight Partners, is suing the firm, alleging disability discrimination, gender discrimination, and wrongful termination, according to a suit filed on December 30 in San Mateo County, California, and seen by TechCrunch.  
     
    Insight Partners did not immediately respond to TechCrunch’s request for comment. 

    Lowry told TechCrunch she filed the suit because she believes “too many powerful, wealthy people in venture act like it’s OK to break the law and systemically underpay and abuse their employees.”

    “It’s an oppressive system that reflect[s] broader trends in society that use fear, intimidation, and power to silence and isolate truth. I’m trying to change that.”

    Lowry began working at Insight Partners in 2022, after previously working for Meta, McKinsey & Company, and an early-stage startup. The suit alleges that, upon being hired, she was assigned to a different supervisor than the person mentioned during her interview.  

    She alleges in the suit that she was told by her new supervisor, who was a woman, to be “online all the time, including PTO, holidays, and weekends,” and to respond between “6 a.m. and 11 p.m. daily.”  

    Lowry says in the suit that this first supervisor “berated, hazed, and antagonized” her, spoke openly about a hazing that would be “longer and more intense” than what she put other male reports through.  

    Some comments the supervisor allegedly made, according to the suit, include “you are incompetent, shut up and take notes” and “you need to obey me like a dog; do whatever I say whenever I say it, without speaking.”  Lowry also alleges that her supervisor assigned her “redundant tasks” and restricted her ability to participate in calls, while allowing less experienced male colleagues to do so. Lowry, instead, she alleges, was relegated to “administrative tasks such as note-taking and cataloging.”  

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    Lowry said she became “increasingly ill” because of the work environment and that her physician advised a medical leave of absence, which she was granted and took from February to July 2023.  

    When she returned to work, she was placed on a new team and, the suit alleges, was told by the head of human resources that “if the new team did not like her, she would be fired.”  

    In September 2023, Lowry said she got a concussion and took another medical leave and returned to work near the end of 2024. Due to some departures, she was placed under the supervision of a new person, where Lowry said her poor treatment continued. She also alleges that in 2024, her compensation was about 30% below the market. 

    By April 2025, she alleges she was told her compensation would be cut. In May of 2025, through her attorneys, Lowry sent a letter to Insight regarding her alleged treatment by the company. A week later, the firm terminated her employment, the suit states.  

    The lawsuit is reminiscent of Ellen Pao’s suit against Kleiner Perkins back in 2012, in which she alleged discrimination and retaliation. That suit offered what was, at the time, a rare glimpse into how women partners felt they were treated in venture capital. Though Pao lost that suit, it sent waves through the industry, and other women went on to sue major tech companies.  

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  • How to make your startup stand out in a crowded market, according to investors | TechCrunch

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    At TechCrunch Disrupt, three investors took the stage to dissect what makes — and breaks — a pitch deck. Jyoti Bansal, a founder-turned-investor; Medha Agarwal of Defy; and Jennifer Neundorfer of January Ventures shared with the crowd their candid views on what works in a pitch deck — and what doesn’t.

    Their biggest pet peeve? Buzzword overload.

    The more a founder says AI in the pitch, Agarwal said, the less AI the company likely uses. “The people who are doing things that are really innovative, they’ll talk about it, and it’s built in, but it’s not the core of their pitch,” she told the audience.  

    Bansal, who built and sold multiple companies before becoming an investor, distilled investor expectations into three core questions. First, he asks whether there is a large enough market to tackle. Does the founder’s idea have the potential to become a huge company? And is the problem he or she is solving actually worth solving?

    The second thing investors want to know is why this founder is the one who should be building the company. “There has to be something unique about you,” Bansal told the crowd, adding that this included having special members on the founding team or having special skills. “Why would you win? If the problem is interesting, there will be 20 other companies trying to solve it, so why would you win and what’s your opportunity?”  

    The third thing investors want to see, Bansal said, is some validation. “Traction with customers,” he said. “Validation could be initial customer feedback, revenue, something, but some kind of validation.”  

    These three questions, Bansal noted, all lead to the ultimate litmus test: Could this become a billion-dollar company?

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    The panel also addressed how AI startups can differentiate themselves as the space becomes saturated. Bansal emphasized the importance of domain expertise and a clear competitive strategy. Neundorfer said the companies that catch her attention are those enabling new behaviors rather than simply improving an existing process incrementally.  

    Agarwal offered more tactical advice to founders, saying they should explain how AI technology enables their product; articulate clear go-to-market strategies; and demonstrate how their business will be more efficient than incumbents.

    It’s also very important to be honest about what competitors are out there, she added. Some of you have “lost some credibility with me because you didn’t have it on your slide,” she told the founders in the audience. 

    Finally, the investors shared advice for navigating the rapidly evolving landscape. Agarwal urged founders to stay on top of industry developments. Neundorfer recommended staying connected to founder networks to share tools and insights.

    Bansal’s advice was simpler: “Focus on building your product.”

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  • What’s ahead for startups and VCs in 2026? Investors weigh in | TechCrunch

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    Each year, we ask some top investors what they think the next year will bring. Last year, some investors thought the IPO market would be back up and running by now (which didn’t quite happen), while others thought the momentum behind AI was poised to accelerate (and they were right). This year, TechCrunch did the same thing, talking to five investors from various markets about what they are preparing for in 2026.  

    Here is what they said.  

    What will it take for a founder to raise next year, compared to last year?  

    James Norman, Managing Partner, Black Ops VC 

    Raising in 2025 requires a shift from “visionary” to “battle-tested.” In previous years, capital has been a primary moat; now investors are wary of “pilot purgatory,” where enterprises test AI solutions without an urgent need to buy. In 2026, the bar is rising. Founders must prove to VCs they have more than just traction; they need a distribution advantage. Investors are digging deeper into repeatable sales engines, proprietary workflow/processes, and deep subject matter expertise that holds up against the “capital arms race.” VCs no longer care about who’s first to market with a flashy demo. They want to know who’s building something that can last, earn trust, and scale long-term.

    Morgan Blumberg, Principal, M13 

    We believe the funding markets will always be available for the best founders, but the bar will rise. At the earliest stages, especially in AI application software, I do expect fewer mega seed rounds given intense competition and capital already deployed across many categories. Founders will need to stand out with unique distribution channels or perspectives, not just by relying on a large market opportunity and strong backgrounds. Capital moats have already formed around crowded sectors. At the Series A and B stages, top-quartile rounds will require clear evidence of explosive momentum. The market has now adjusted to these expectations with increased scrutiny on the sustainability of revenue.

    Allen Taylor, Managing Partner, Endeavor Catalyst  

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    Bigger, faster, better: bigger total addressable market, faster growth, better unit economics. We made 50 investments last year across 25 countries, and we expect to do more this year, so we’re seeing founders at very different stages and in very different markets. The strongest founders aren’t just showing what they’ve built so far — they’re helping investors understand where the business is going next. Real revenue and real customers still matter, but they’re not sufficient on their own. As an investor, I’m always asking: Where is this company today, and where could it realistically be in the next 12, 18, or 24 months? The founders who raise are the ones who can answer that question clearly and credibly.

    Dorothy Chang, Partner, Flybridge Capital

    A lot of founders are finding it easy to build new things because generative AI coding tools are so advanced today. But in truth, those tools are leveling the playing field for everyone, and competition is more fierce than ever. So founders building for venture scale need to make sure that they are (1) truly tackling a big idea, not just something that’s easy to vibe code; (2) building in a problem area that they are uniquely positioned to win; and (3) bringing something proprietary that can’t easily be replicated. This could be a contrarian approach with unique insights, proprietary access to data, deep networks/relationships, a technological advantage, etc. These aren’t new concepts, but the stakes and expectations are higher than ever.

    Shamillah Bankiya, Partner, Dawn Capital

    For founders selling to enterprises, I think the entire world has gotten smarter on the value that AI can deliver, and as such, proving — showing line of sight to ROI — will be more important than ever to investors. Founders who can prove that their products offer much higher value have the best shot at raising capital.

    What areas are you looking to invest in and why? 

    Norman

    As a fund, we remain industry-agnostic generalists, but we are always sharpening our lens. Today we’re looking for “high-context founders.” In a world where AI has commoditized the ability to write code, the winning edge is now lived experience. We want to invest in the founder who has spent years in the trenches of a complex industry and possesses the bespoke expertise that can be 10x’d by AI. For us, the ideal investment is a marriage of deep subject matter expertise and a “day zero” distribution advantage, meaning founders don’t just know what to build but already know exactly who is going to buy it.

    Blumberg  

    We are particularly interested in sleepy or legacy industries that sit outside core tech founder appetite, where AI can offer step-change ROI that drives adoption. These markets have lower competition and moats driven by complexity that often come with less obvious sectors. We also believe 2026 will be a great year for infrastructure supporting foundational model development, as well as frontier research categories like embodied AI and world models. Healthcare remains a major focus given clear signs of buyer demand; we focus on systems of record and platforms rather than point solutions.

    Taylor 

    Outside the United States! The best risk-adjusted venture returns are not in Silicon Valley anymore. They are in markets like Poland, Turkey, and Greece.

    When you invest across 25 countries in a single year, you stop thinking of venture as something that happens in one place and then spreads outward. Twenty years ago, roughly 90% of venture dollars went to the United States. That flipped in 2018. Today, more than half of venture investment — and more than half of the world’s unicorns — are outside the U.S.

    We see this every day. Founders in Latin America, Africa, the Middle East, and South Asia are building venture-scale companies — often serving massive markets from the start. In our pipeline, it’s normal to see founders from Venezuela building in Iraq, or from Sudan building global businesses.

    Chang

    I’m most interested in founders who are tackling massive problems and leveraging technology for forward progress. I’m rather unmoved by the plethora of startups focused on agentically automating workflows for specific verticals. I’m much more interested in the larger platform shifts that will define this era of technological and societal progress.

    Bankiya

    We’ve seen tremendous impact on software from AI. I think the next frontier is at the intersection of software and hardware. Most of the world’s GDP is locked up in physical industries, and software-only solutions aren’t enough to fully unlock the world’s growth potential.

    Do you think the IPO market will thaw? Why or why not? 

    Norman 

    Yes, the IPO market is likely to thaw, not because conditions are suddenly ideal, but because the system is running out of viable alternatives. We’re approaching a tipping point where the private market’s ability to sustain multibillion-dollar valuations, often disconnected from profitability or liquidity, is wearing thin. Years of “paper markups” have postponed reality, but they haven’t eliminated it. Companies, boards, and late-stage investors increasingly need a mechanism to reset expectations, generate real liquidity, and re-establish price discovery. 

    Private credit has acted as a stopgap, extending runways without forcing valuation discipline. But that bridge is starting to look more like a pressure cooker. Debt can delay decisions, not solve structural capital needs, especially for companies built for equity-style growth. At some point, fresh capital becomes necessary, and public markets remain the only place capable of providing it at scale. Their growth narratives and strategic importance can provide the “air cover” needed to reopen the IPO window. Once investors re-engage around category-defining leaders, it creates permission for the broader high-growth software sector to follow.

    Blumberg 

    I think we will see a reopening of the IPO markets driven by the backlog of companies planning to list. Many large tech IPOs are anticipated, including darlings like Anthropic and OpenAI, and I believe one of these mega IPOs will drive considerable momentum for others. 

    Taylor 

    Yes — 2026 will be a big year for IPOs in New York as dozens of the top companies simply decide “it’s time.” It will also be a banner year for tech IPOs in places folks are not used to seeing them — like the stock market in Saudi Arabia. 

    I think people underestimate how global the thaw will be. We’ve had nearly four years of muted IPO activity, which has created a backlog of high-quality companies that are ready to be public. When the window opens, it won’t just be U.S. companies stepping through it. There’s already a cohort of major U.S.-listed technology companies from Latin America, including MercadoLibre and Nubank, and there’s another wave right behind them that public-market investors haven’t fully priced in yet. I don’t think all of those companies list in 2026, but several will. 

    What’s even more unexpected is what happens locally. You’re going to see meaningful technology IPOs in places like Saudi Arabia, listed on the Saudi Stock Exchange (Tadawul). When companies like Tabby [a buy now, pay later outfit] go public locally, it will challenge assumptions about where global tech outcomes happen. 

    Chang

    We’re looking to make slightly fewer, more concentrated bets. There is a ton of startup activity, so when we meet founders who really stand out, we want to be able to back up our high conviction with a higher check size and higher ownership percentage.

    Bankyia

    I think a hard catalyst would be required to reset the IPO markets — something akin to mega AI players facing unprecedented cost increases or sharp revenue declines. Think, for example, of energy prices sharply rising, such that it’s unaffordable to offer compute for AI training and inference.

    How are you looking at the venture market for next year as a fund manager? 

    Norman  

    We’re entering what I’d describe as a clearing event for the venture market, and next year will separate durable platforms from transient ones. The fallout will hit Fund I managers who haven’t found their footing, and active Fund II managers struggling with a [distributions-paid-in-capital, or DPI] drought from 2021 vintages. Traditional institutional anchors, particularly university endowments, are effectively in repair mode. After being squeezed by the absence of liquidity in 2021 and 2022, many are leaning on secondaries, pacing adjustments, and portfolio-smoothing strategies just to maintain existing commitments. 

    That means fewer new relationships and far less tolerance for emerging or undifferentiated managers. Stepping into their place are family offices that have moved from passive LP roles to active market forces. They aren’t just filling the “LP oxygen” left by retreating institutions; they are scoping direct mandates and using [registered investment advisors] to hunt for unique, high-conviction strategies.

    In 2026, there is no viable middle ground. You need to have a clinical, defensible track record and/or truly unfair access to differentiated deal flow. Lightly grounded generalist positioning, soft networks, and “good enough” performance won’t survive this cycle.

    Blumberg  

    We believe we are in the early innings of AI transformation, so we expect next year to be a strong vintage. Capital continues to concentrate in a select number of winners so we focus on being selective and operationally supporting our companies to earn our right to concentrate. We are advising our portfolio companies to strengthen their balance sheets in case of a downturn in 2026 while focusing on building for the long term rather than optimizing for fast funding.

    Taylor  

    Amazing time to back the boldest founders building for the next 10+ years! From a fund manager’s perspective, 2026 looks strong on both deployment and liquidity. Last year we had 12 liquidity events — all through M&A and secondaries. That matters because venture has grown dramatically over the last two decades, while paths to liquidity didn’t keep pace. What’s changing now is that venture is building a more complete liquidity toolkit — M&A, secondaries, and IPOs working together. 

    That’s critical when founders are committing 10, 15, even 20 years to building companies. At the same time, we’re seeing real structural shifts in core sectors. Financial technology, especially stablecoins, moved from experimentation to mainstream adoption in 2025, particularly in markets like Latin America and Africa. In those places, this isn’t speculative technology; it’s infrastructure. That combination is why 2026 looks like a strong year to be deploying capital.

    Bankyia

    We’re still searching for phenomenal European founders building groundbreaking companies. Great companies are formed in all cycles.

    What will happen to all the investor and startup interest in AI next year? 

    Norman  

    In 2026, the “AI curiosity” that fueled the last two years is being replaced by a demand for application and scale. We are moving from the era of building models to the era of building businesses. The fastest, most innovative companies aren’t the ones with the largest LLMs; they are the ones using AI to solve high-value, domain-specific problems that were previously too complex or too manual to scale. Investors aren’t looking for “AI startups” anymore; we’re looking for exceptional tech founders who have found a way to use this intelligence to 10x the efficiency of a massive, traditional market.

    Blumberg  

    We expect investor and startup interest to continue at all-time highs. However, I do think we will start to see tuck-in acquisitions, acquihires, and wind-downs in highly concentrated sectors such as coding automation, sales automation, marketing, and advertising as market share starts to concentrate in select assets.  

    Taylor  

    It will continue. But by the end of 2026, I predict AI will stop being a separate category, as it will just be a part of all new technology companies being built. 

    There’s a lot of breathless talk about AI right now — and that’s understandable. We’re still very early in understanding what this technology will actually change. In moments like this, excitement tends to run ahead of clarity. Some companies will be transformational, many won’t, and pricing will take time to adjust as real use cases emerge. The opportunity isn’t in labeling everything as “AI.” It’s in understanding where AI meaningfully changes cost structures, speed, or decision-making inside real businesses. That’s where durable value gets created.

    This is one of those moments when the fog is thick, and that’s when outcomes diverge the most. 

    Chang

    I don’t see it slowing down anytime soon. We’ve seen a lot of dollars go into infrastructure and theory; this year we’ll see a lot more of that investment more clearly turn into enterprise value at the application level.

    Bankyia

    AI will remain a hot topic, barring negative hard catalysts that dramatically change conditions, like an energy crisis or a rise in default rates.

    What is something unexpected that could happen in 2026 in the world of venture and startups? 

    Norman  

    One of the most unexpected shifts of 2026 will be the quiet end of the “ChatGPT-first” era in startups. Not because generative AI loses importance, but because no single model remains the default starting point. GPT is no longer consistently best-in-class for search, image generation, or video, which fundamentally changes how tech companies architect their products. The savvy founders in 2026 have already graduated to a multi-model world, and instead their focus has shifted to specialization. 

    For example, Anthropic has effectively captured the developer’s mindshare because Claude Code is better at building with you, and Google has finally activated its structural advantages. With Gemini 3, it’s pairing top-tier image and video generation with deep multimodal capability and native access to Google’s search and data ecosystem. That combination is proving hard to compete with. Model choice becomes an infrastructure decision, not a moat. The winners in 2026 won’t be the companies that “use GPT,” but the ones that orchestrate multiple models seamlessly, abstract complexity away from users, and build proprietary workflows on top.

    Blumberg  

    We expect to see many successful startups built with only one or two rounds of capital. AI tooling (especially coding automation) enables many early-stage companies to accomplish profitability without excessive burn. From a technology perspective, while LLMs are expected to be everywhere, companies will start to scale back usage in favor of more controlled use as enterprises prioritize explainability, cost, and reliability. This could drive heavier use of small models, deterministic and probabilistic hybrid models, world models, or simulation modeling.

    Taylor 

    The end of the Russia-Ukraine war will bring about a renaissance of investing in Ukrainian founders, who are some of the best in the world! Two additional things will genuinely surprise people. First, international companies — especially from Latin America — going public in New York at scale. Second, major technology IPOs coming out of the Middle East, listed locally. When companies like Tabby go public on the Saudi Stock Exchange (Tadawul), it will reset expectations about where global tech leadership lives.

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  • Heidi Health raises $65M Series B led by Steve Cohen’s Point72 | TechCrunch

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    Dr. Tom Kelly is a trauma surgeon, and everywhere, he sees doctors drowning in administrative work. He wanted change, so he set out to build it. 

    “We wanted to build an AI care partner that would stand alongside clinicians and take care of the admin so that individual providers, like me, can feel empowered to deliver the care which we dedicated our lives to,” he told TechCrunch. 

    Dr. Kelly teamed up with Waleed Mussa, with whom he had worked at a previous startup, and founded Heidi Health in 2021. The company began launching products in early 2024. 

    In just 18 months, he said, the company has returned more than “18 million hours to frontline healthcare providers from more than 70 million patient visits in 116 countries.” 

    The product, as promised, is an AI medical scribe that takes care of all the admin work that hassles doctors. It can transcribe and dictate notes, generate personalized patient summaries, and even track tasks so doctors no longer have a need for sticky notes. 

    Heidi both built its own AI model and builds on top of other models, such as Gemini. “This model agnostic approach means that we can optimize our accuracy, latency, and cost,” he said. 

    On Monday, the company announced a $65 million Series B led by Steve Cohen’s Point72. It also announced a new tool: an AI agent that calls patients on behalf of the doctor. The former Chief Medical Officer at Microsoft, Dr. Simon Kos, is also coming on board, along with Plaid’s head of revenue, Paul Williamson. 

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    The company has raised $96.6 million to date. Others in the round include Goodwater Capital, Headline, Blackbird VC, LG Technology Ventures, and Alumni Ventures. 

    “They had seen all the scribes before,” Dr. Kelly said of Point72. “They’d never seen product adoption and usage metrics like they’d seen in Heidi. They also loved that we were obsessed about the end user experience, because they saw most of our competitors were just doing top-down sales.” 

    The fresh capital will be used to help with product development. 

    Dr. Kelly hopes that giving doctors more access to AI tools will expand the capabilities of clinicians and remove the “drudgery” of their work. 

    He said most of the conversations in the medical world right now are shaped by what is happening in developed countries, “but imagine a world where any healthcare provider in the world can use Heidi to increase their clinical capacity, where they can practice in a war zone, or a refugee camp, or a region hit by climate change or simply an underserved community,” he continued. “Heidi can help them reach more patients and deliver better health care results.”  

    AI is transforming the health tech. Others in the medical scribe space, in particular, include DeepScribe, Ambiance Healthcare, and Abridge. 

    Heidi said it works with more than 2 million clinicians a week, ranging from hospitals to individual practices. It has a free version of the product with paid features, which Dr. Kelly believes has been a good lure for new customers. 

    He said AI is understandably going to change everything in healthcare. But at its core, humanity is still very essential, especially when it comes to maintaining and building trust. 

    “It’s about doubling the world’s health care capacity. That’s the true promise of AI,” he said. “We want to bring it about.” 

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  • Vibe coding has turned senior devs into ‘AI babysitters,’ but they say it’s worth it | TechCrunch

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    Carla Rover once spent 30 minutes sobbing after having to restart a project she vibe coded. 

    Rover has been in the industry for 15 years, mainly working as a web developer. She’s now building a startup, alongside her son, that creates custom machine learning models for marketplaces. 

    She called vibe coding a beautiful, endless cocktail napkin on which one can perpetually sketch ideas. But dealing with AI-generated code that one hopes to use in production can be “worse than babysitting,” she said, as these AI models can mess up work in ways that are hard to predict. 

    She had turned to AI coding in a need for speed with her startup, as is the promise of AI tools. 

    “Because I needed to be quick and impressive, I took a shortcut and did not scan those files after the automated review,” she said. “When I did do it manually, I found so much wrong. When I used a third-party tool, I found more. And I learned my lesson.” 

    She and her son wound up restarting their whole project — hence the tears. “I handed it off like the copilot was an employee,” she said. “It isn’t.” 

    Rover is like many experienced programmers turning to AI for coding help. But such programmers are also finding themselves acting like AI babysitters — rewriting and fact-checking the code the AI spits out. 

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    A recent report by content delivery platform company Fastly found that at least 95% of the nearly 800 developers it surveyed said they spend extra time fixing AI-generated code, with the load of such verification falling most heavily on the shoulders of senior developers.

    These experienced coders have discovered issues with AI-generated code ranging from hallucinating package names to deleting important information and security risks. Left unchecked, AI code can leave a product far more buggy than what humans would produce.

    Working with AI-generated code has become such a problem that it’s given rise to a new corporate coding job known as “vibe code cleanup specialist.” 

    TechCrunch spoke to experienced coders about their time using AI-generated code about what they see as the future of vibe coding. Thoughts varied, but one thing remained certain: The technology still has a long way to go. 

    “Using a coding co-pilot is kind of like giving a coffee pot to a smart six-year-old and saying, ‘Please take this into the dining room and pour coffee for the family,’” Rover said. 

    Can they do it? Possibly. Could they fail? Definitely. And most likely, if they do fail, they aren’t going to tell you. “It doesn’t make the kid less clever,” she continued. “It just means you can’t delegate [a task] like that completely.” 

    “You’re absolutely right!” 

    Feridoon Malekzadeh also compared vibe coding to a child.

    He’s worked in the industry for more than 20 years, holding various roles in product development, software, and design. He’s building his own startup and heavily using vibe-coding platform Lovable, he said. For fun, he also vibe codes apps like one that generates Gen Alpha slang for Boomers. 

    He likes that he’s able to work alone on projects, saving time and money, but agrees that vibe coding is not like hiring an intern or a junior coder. Instead, vibe coding is akin to “hiring your stubborn, insolent teenager to help you do something,” he told TechCrunch. 

    “You have to ask them 15 times to do something,” he said. “In the end, they do some of what you asked, some stuff you didn’t ask for, and they break a bunch of things along the way.” 

    Malekzadeh estimates he spends around 50% of his time writing requirements, 10% to 20% of his time on vibe coding, and 30% to 40% of his time on vibe fixing — remedying the bugs and “unnecessary script” created by AI-written code. 

    He also doesn’t think vibe coding is the best at systems thinking — the process of seeing how a complex problem could impact an overall result. AI-generated code, he said, tries to solve more surface-level problems. 

    “If you’re creating a feature that should be broadly available in your product, a good engineer would create that once and make it available everywhere that it’s needed,” Malekzadeh said. “Vibe coding will create something five different times, five different ways, if it’s needed in five different places. It leads to a lot of confusion, not only for the user, but for the model.”

    Meanwhile, Rover finds that AI “runs into a wall” when data conflicts with what it was hard-coded to do. “It can offer misleading advice, leave out key elements that are vital, or insert itself into a thought pathway you’re developing,” she said. 

    She also found that rather than admit to making errors, it will manufacture results.

    She shared another example with TechCrunch, where she questioned the results an AI model initially gave her. The model started to give a detailed explanation pretending it used the data she uploaded. Only when she called it out did the AI model confess.

    “It freaked me out because it sounded like a toxic co-worker,” she said.

    On top of this, there are the security concerns.

    Austin Spires is the senior director of developer enablement at Fastly and has been coding since the early 2000s. 

    He’s found through his own experience — along with chatting with customers — that vibe code likes to build what is quick rather than what is “right.” This may introduce vulnerabilities to the code of the kind that very new programmers tend to make, he said. 

    “What often happens is the engineer needs to review the code, correct the agent, and tell the agent that they made a mistake,” Spires told TechCrunch. “This pattern is why we’ve seen the trope of ‘you’re absolutely right’ appear over social media.” 

    He’s referring to how AI models, like Anthropic Claude, tend to respond “you’re absolutely right” when called out on their mistakes.

    Mike Arrowsmith, the chief technology officer at the IT management software company NinjaOne, has been in software engineering and security for around 20 years. He said that vibe coding is creating a new generation of IT and security blind spots to which young startups in particular are susceptible.

    “Vibe coding often bypasses the rigorous review processes that are foundational to traditional coding and crucial to catching vulnerabilities,” he told TechCrunch.

    NinjaOne, he said, counters this by encouraging “safe vibe coding,” where approved AI tools have access controls, along with mandatory peer review and, of course, security scanning. 

    The new normal

    While nearly everyone we spoke to agrees that AI-generated code and vibe-coding platforms are useful in many situations — like mocking up ideas — they all agree that human review is essential before building a business on it.

    “That cocktail napkin is not a business model,” Rover said. “You have to balance the ease with insight.” 

    But for all the lamenting on its errors, vibe coding has changed the present and the future of the job. 

    Rover said vibe coding helped her tremendously in crafting a better user interface. Malekzadeh simply said that, despite the time he spends fixing code, he still gets more done with AI coders than without them.

    “‘Every technology carries its own negativity, which is invented at the same time as technical progress,” Malekzadeh said, quoting the French theorist Paul Virilio, who spoke about inventing the shipwreck along with the ship.

    The pros far outweigh the cons.

    The Fastly survey found that senior developers were twice as likely to put AI-generated code into production compared to junior developers, saying that the technology helped them work faster. 

    Vibe coding is also part of Spires’ coding routine. He uses AI coding agents on several platforms for both front-end and back-end personal projects. He called the technology a mixed experience but said it’s good in helping with prototyping, building out boilerplate, or scaffolding out a test; it removes menial tasks so that engineers can focus on building, shipping, and scaling products. 

    It seems the extra hours spent combing through the vibe weeds will simply become a tolerated tax on using the innovation.

    Elvis Kimara, a young engineer, is learning that now. He just graduated with a master’s in AI and is building an AI-powered marketplace. 

    Like many coders, he said vibe coding has made his job harder and has often found vibe coding a joyless experience. 

    “There’s no more dopamine from solving a problem by myself. The AI just figures it out,” he said. At one of his last jobs, he said senior developers didn’t look to help young coders as much — some not understanding new vibe-coding models, while others delegated mentorship tasks to said AI models.

    But, he said, “the pros far outweigh the cons,” and he’s prepared to pay the innovation tax. 

    “We won’t just be writing code; we’ll be guiding AI systems, taking accountability when things break, and acting more like consultants to machines,” Kimara said of the new normal for which he’s preparing.  

    “Even as I grow into a senior role, I’ll keep using it,” he continued. “It’s been a real accelerator for me. I make sure I review every line of AI-generated code so I learn even faster from it.”

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    Dominic-Madori Davis

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  • Announcement by Venture Solutions: New Warehouse Completed in Laredo, Texas, and Offices Expanded in Saltillo, Mexico

    Announcement by Venture Solutions: New Warehouse Completed in Laredo, Texas, and Offices Expanded in Saltillo, Mexico

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    ROCHESTER HILLS, Mich., July 30, 2024 (Newswire.com)
    –
    Venture Solutions, a leader in customized logistics networks and supply chain optimization, proudly announces the completion of its new warehouse in Laredo, Texas. Along with this milestone, the company is also expanding its office in Saltillo, Mexico, further cementing its commitment to providing comprehensive supply chain solutions across North America.

    The new Laredo warehouse, a 150,000 sq. ft. facility with 30 dock doors and space for 100 trailers, displays Venture Solutions’ dedication to constantly enhancing its supply chain capabilities. The facility offers comprehensive cross-border services, including consolidation, warehousing, and vendor-managed inventory. Additionally, the warehouse is CTPAT and ISO-certified, reflecting Venture Solutions’ commitment to maintaining the highest standards of security and quality.

    “The opening of our Laredo facility marks a significant step in our mission to provide full supply chain optimizations,” said Justin Weber, Chief Operating Officer of Venture. “This new warehouse allows us to better serve our clients across North America, particularly those in the automotive and heavy industrial sectors, who rely on the robust and full-scale capabilities we offer in this key location.”

    Along with the new warehouse in Laredo, Venture Solutions is expanding its office in Saltillo, Mexico. This growth is designed to support customers requiring both cross-border services and intra-Mexico freight solutions. The enhanced Saltillo office will provide comprehensive coverage for core manufacturing regions in Mexico and national transportation services, strengthening Venture Solutions’ ability to serve its diverse client base.

    “Our expansion in Saltillo is truly about Mexico becoming more centralized in supply chain management and decision making,” Weber said. “With this increased presence, we can offer our customers seamless service across borders and within Mexico, boosting their operational efficiency and supply chain performance.”

    Venture Solutions manages more than 10,000 border crossings annually, highlighting its expertise in navigating complex logistics environments. With over one million sq. ft. of warehouse space across five consolidation centers and cross docks, Venture Solutions continues to lead the industry in delivering strategic, optimized logistics solutions.

    Venture Solutions, headquartered in Rochester Hills, Mich., provides strategic guidance for developing customized and optimized logistics networks. Specializing in supply chain optimization, consolidation, and warehousing, Venture Solutions serves automotive OEMs, heavy industrial customers, and consumer products. As a business unit within the broader Venture umbrella, Venture Solutions works alongside Venture Transport, asset-based transportation, and Venture Connect, brokerage, to deliver comprehensive logistics and transportation solutions.

    For more information about Venture Solutions and its services, please visit www.venturelogistics.com.

    ###

    Source: Venture Logistics

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  • Completion of New Warehouse in Laredo, Texas, and Expansion of Office in Saltillo, Mexico Announced by Venture Solutions

    Completion of New Warehouse in Laredo, Texas, and Expansion of Office in Saltillo, Mexico Announced by Venture Solutions

    [ad_1]


    ROCHESTER HILLS, Mich., July 30, 2024 (Newswire.com)
    –
    Venture Solutions, a leader in customized logistics networks and supply chain optimization, proudly announces the completion of its new warehouse in Laredo, Texas. Along with this milestone, the company is also expanding its office in Saltillo, Mexico, further cementing its commitment to providing comprehensive supply chain solutions across North America.

    The new Laredo warehouse, a 150,000 sq. ft. facility with 30 dock doors and space for 100 trailers, displays Venture Solutions’ dedication to constantly enhancing its supply chain capabilities. The facility offers comprehensive cross-border services, including consolidation, warehousing, and vendor-managed inventory. Additionally, the warehouse is CTPAT and ISO-certified, reflecting Venture Solutions’ commitment to maintaining the highest standards of security and quality.

    “The opening of our Laredo facility marks a significant step in our mission to provide full supply chain optimizations,” said Justin Weber, Chief Operating Officer of Venture. “This new warehouse allows us to better serve our clients across North America, particularly those in the automotive and heavy industrial sectors, who rely on the robust and full-scale capabilities we offer in this key location.”

    Along with the new warehouse in Laredo, Venture Solutions is expanding its office in Saltillo, Mexico. This growth is designed to support customers requiring both cross-border services and intra-Mexico freight solutions. The enhanced Saltillo office will provide comprehensive coverage for core manufacturing regions in Mexico and national transportation services, strengthening Venture Solutions’ ability to serve its diverse client base.

    “Our expansion in Saltillo is truly about Mexico becoming more centralized in supply chain management and decision making,” Weber said. “With this increased presence, we can offer our customers seamless service across borders and within Mexico, boosting their operational efficiency and supply chain performance.”

    Venture Solutions manages more than 10,000 border crossings annually, highlighting its expertise in navigating complex logistics environments. With over one million sq. ft. of warehouse space across five consolidation centers and cross docks, Venture Solutions continues to lead the industry in delivering strategic, optimized logistics solutions.

    Venture Solutions, headquartered in Rochester Hills, Mich., provides strategic guidance for developing customized and optimized logistics networks. Specializing in supply chain optimization, consolidation, and warehousing, Venture Solutions serves automotive OEMs, heavy industrial customers, and consumer products. As a business unit within the broader Venture umbrella, Venture Solutions works alongside Venture Transport, asset-based transportation, and Venture Connect, brokerage, to deliver comprehensive logistics and transportation solutions.

    For more information about Venture Solutions and its services, please visit www.venturelogistics.com.

    ###

    Source: Venture Logistics

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    Source link

  • Venture Solutions Announces Completion of New Warehouse in Laredo, Texas, and Expansion of Office in Saltillo, Mexico

    [ad_1]


    ROCHESTER, Mich., July 30, 2024 (Newswire.com)
    –
    Venture Solutions, a leader in customized logistics networks and supply chain optimization, proudly announces the completion of its new warehouse in Laredo, Texas. Along with this milestone, the company is also expanding its office in Saltillo, Mexico, further cementing its commitment to providing comprehensive supply chain solutions across North America.

    The new Laredo warehouse, a 150,000 sq. ft. facility with 30 dock doors and space for 100 trailers, displays Venture Solutions’ dedication to constantly enhancing its supply chain capabilities. The facility offers comprehensive cross-border services, including consolidation, warehousing, and vendor-managed inventory. Additionally, the warehouse is CTPAT and ISO-certified, reflecting Venture Solutions’ commitment to maintaining the highest standards of security and quality.

    “The opening of our Laredo facility marks a significant step in our mission to provide full supply chain optimizations,” said Justin Weber, Chief Operating Officer of Venture. “This new warehouse allows us to better serve our clients across North America, particularly those in the automotive and heavy industrial sectors, who rely on the robust and full-scale capabilities we offer in this key location.”

    Along with the new warehouse in Laredo, Venture Solutions is expanding its office in Saltillo, Mexico. This growth is designed to support customers requiring both cross-border services and intra-Mexico freight solutions. The enhanced Saltillo office will provide comprehensive coverage for core manufacturing regions in Mexico and national transportation services, strengthening Venture Solutions’ ability to serve its diverse client base.

    “Our expansion in Saltillo is truly about Mexico becoming more centralized in supply chain management and decision making,” Weber said. “With this increased presence, we can offer our customers seamless service across borders and within Mexico, boosting their operational efficiency and supply chain performance.”

    Venture Solutions manages more than 10,000 border crossings annually, highlighting its expertise in navigating complex logistics environments. With over one million sq. ft. of warehouse space across five consolidation centers and cross docks, Venture Solutions continues to lead the industry in delivering strategic, optimized logistics solutions.

    Venture Solutions, headquartered in Rochester Hills, Mich., provides strategic guidance for developing customized and optimized logistics networks. Specializing in supply chain optimization, consolidation, and warehousing, Venture Solutions serves automotive OEMs, heavy industrial customers, and consumer products. As a business unit within the broader Venture umbrella, Venture Solutions works alongside Venture Transport, asset-based transportation, and Venture Connect, brokerage, to deliver comprehensive logistics and transportation solutions.

    For more information about Venture Solutions and its services, please visit www.venturelogistics.com.

    Source: Venture Logistics

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  • DEI backlash: Stay up-to-date on the latest legal and corporate challenges | TechCrunch

    DEI backlash: Stay up-to-date on the latest legal and corporate challenges | TechCrunch

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    The Great Rollback is here. The phrase refers to Big Tech starting to slash some of the diversity, equity and inclusion (DEI) programs that were implemented shortly after the murder of George Floyd. Most recently, Zoom announced that it laid off its DEI team. Google and Meta have started to defund their DEI programs, and funding to Black founders continues to dip. Lawsuits have been filed targeting DEI programs, forcing companies to now hide their inclusion efforts while billionaires are arguing on X about whether DEI initiatives are discriminatory or not.

    It’s clear that this year will be a turning point for DEI, especially as states continue to ban affirmative action measures and with a presidential election just around the corner. Here are all the stories you need to read to stay updated on the developments regarding tech’s ongoing DEI backlash.

    This list will be updated, so keep checking back.

    Read about the AAER vs. Fearless Fund lawsuit

    In August 2023, the American Alliance for Equal Rights (AAER), founded by Edward Blum, the man who helped overturn affirmative action in education, filed a lawsuit against the venture fund Fearless Fund for offering business grants to Black women. The AAER alleged that the grant discriminates against white and Asian American founders. The Fund and AAER are battling the case in court, and currently, Fearless Fund is barred from awarding grants to any more Black women.

    On Instagram, Arian Simone, the CEO of the Fund, said that the lawsuit has financially hurt the fund, as it lost millions in potential commitments and faced staff cuts, low cash run, expensive legal bills and threatening letters. The impact of the lawsuit, however, could go much deeper than just affecting one fund and could have ripple effects throughout the ecosystem.

    But Fearless Fund isn’t the only one being sued. The Small Business Administration, Minority Business Development Agency and even smaller companies like Hello Alice are being targeted and sued for trying to implement diverse grant schemes.

    Read what critics are saying about DEI

    Anti-DEI rhetoric has dramatically increased. A lot of big names in venture, like Elon Musk, Peter Thiel and Y Combinator founder Paul Graham, have shared sentiments against DEI, while only a few, like Mark Cuban, have expressed support for it. This division is bound to last and only get deeper as billionaires continue wielding their power — and influence — to make their opinions heard.

    At the same time, there are many who are indeed trying to change and become more inclusive. Change takes time, though, and some of the promises made haven’t been fulfilled.

    Read how governments are handling DEI

    California passed a bill last year that will soon require venture capital firms in the state to reveal the diversity breakdown of the founders they back. Some herald the bill as progress in a notoriously opaque industry.

    However, California is not the only state looking to address diversity. Massachusetts is looking to pass a bill that would extend workplace laws to the venture industry; New York City venture firms informally got together to create an alliance to back more diversity. There is excitement surrounding these initiatives, but also some hesitation.

    Rep. Emanuel Cleaver, who is co-chair of the Congressional Black Caucus, has been trying to pass a bill in Congress that would make endowment investing more transparent. He’s hit a snag and said that a few educational institutions in the nation have been outright “nasty” toward him and his efforts.

    DEI has become a hotbed issue in red states, as many have taken to banning affirmative action measures. Many tech hubs are actually just blue cities, meaning more liberal-leaning cities, within red, or more conservative-leaning, states. These include Tulsa, Atlanta, Miami and Austin, and all are at the forefront of helping to make tech more accessible to people outside of the Bay Area. But will their governing states put a dagger in all that progress?

    Gov. Ron DeSantis, for example, is a leader in passing anti-DEI measures. From book banning to speech restrictions, he is also one of a few governors taking aim at ESG investing, proposing a move that could affect diverse fund managers in the state of Florida.

    On a national level, the Congressional Black Caucus (CBC) has taken to finding out more about what is happening in tech. It recently wrote letters to OpenAI and the Department of Labor to see how the tech industry is looking to support Black talent during this time.

    OpenAI actually did respond to the CBC, and we got the scoop on what happened next.

    Read the latest DEI funding data

    Funding to Black founders has continued to dip since 2020, and last year was no different.

    Read the DEI view from abroad

    Industries abroad look to the States, including when it comes to how marginalized founders are treated. Stay up-to-date on how global venture ecosystems are handling DEI and what it says about progress in the U.S.

    France is a notoriously tricky ecosystem for Black Founders. Learn how the country is navigating one of the most opaque venture landscapes for people of color.

    The U.K., meanwhile, has made a lot of progress regarding funding for Black founders.

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    Dominic-Madori Davis

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  • Griffin Bank has a license to thrill | TechCrunch

    Griffin Bank has a license to thrill | TechCrunch

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    Welcome to TechCrunch Fintech (formerly The Interchange)! I’m filling in for Mary Ann, who is on a much deserved break. This week, we look at Griffin Bank getting its license ahead of some heavy hitters, and we go inside Stripe’s annual letter, some funding rounds, and more!

    The big story

    A top story for this week was Griffin Bank over in the U.K. The banking-as-a-service company managed to do something that even the region’s most valuable fintech company, Revolut, hasn’t been able to do yet — obtain a banking license. Granted, as Mike Butcher writes, banking licenses are difficult to come by (Griffin’s took a year), but Revolut has talked about securing a banking license for the past three years.

    Now that Griffin has a banking license, it offers a full-stack platform for fintech companies to offer banking, payments and wealth solutions via automated compliance and an integrated ledger. More likely, the company will offer banking accounts to businesses rather than consumers.

    Analysis of the week

    Alex Wilhelm and I read through Stripe’s annual letter. Here are a few things that we thought were worth talking about:

    • The company’s growth is impressive. It hit the $1 trillion total payment volume mark in 2023, while noting its payment volume rose 25%. That said, if the company did, in fact, process precisely $1 trillion last year, it would imply $800 billion in 2022 processing and gains of $200 billion worth of TPV in a single year. At Stripe’s size, it’s quite a result.
    • Stripe saw record startup formation in 2023 despite the decline in venture capital activity in the past year. Not only that, but the payments infrastructure company also reported that those companies were 60% more likely to start collecting revenue within their first year, while 57% were more likely to process $1 million within their first year than those founded in 2019.

    Dollars and cents

    We have a new unicorn. Perfios, an India-based company providing financial institutions with real-time data aggregation and analysis tools to help them streamline their customer journeys and make more informed decisions, raised an $80 million round of funding that boosted its valuation to over $1 billion. Ontario Teachers’ Pension Plan led the round. The company said it plans to go public next year.

    Manish Singh also wrote about India digital payments app Paytm, which secured a vital license it needed to survive and maintain continuity of several core app features. This came a day before the firm’s banking unit was scheduled to cease operations on March 15 because of regulatory restrictions.

    OpenMeter, a startup that developed an open source platform that helps companies more easily track their usage-based billing, raised a $3 million round from Y Combinator, Haystack and Sunflower Capital.

    What else we’re writing

    Reddit’s IPO could become a potential meme stock in the way the company is choosing to set it up. In a new SEC filing, Reddit’s IPO involves around 22 million shares, priced between $31 and $34. However, this could get real interesting real quick given that Reddit will allow its community members to sell their shares immediately, instead of being subject to the usual lock-up agreements that typically prevent investors from selling shares for six months after the IPO.

    Most subscription mobile apps don’t make money, according to an analysis by RevenueCat. Among the 29,000 apps it looked at, the company found that only 17.2% of apps will reach even $1,000 in monthly revenue, but after they hit that point, the odds of them growing further increase.

    TikTok expanded its Effect Creator Rewards monetization program to more regions and lowered its payout threshold. It is now in 33 regions across Europe, Asia, the Middle East and Latin America. The program rewards creators for the effects they make through TikTok’s AR development platform, Effect House. TikTok is also updating the program’s payout model, as creators will now receive rewards only for effects used in public videos.

    High-interest headlines

    HSBC to hire almost 50 bankers for startup, venture lending in US

    Green Dot to enable cash transactions for 3 more fintechs

    With fintech funding down 70%, here’s what fintech’s high-flyers are worth now 

    Maxwell launches POS feature that offers tailored workflows for lenders

    JPMorgan sees mixed results from Silicon Valley push

    Want to reach out with a tip? Email me at maryann@techcrunch.com or send me a message on Signal at 408.204.3036. You can also send a note to the whole TechCrunch crew at tips@techcrunch.com. For more secure communications, click here to contact us, which includes SecureDrop (instructions here) and links to encrypted messaging apps.

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    Christine Hall

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  • Here's what to know to raise a Series A right now | TechCrunch

    Here's what to know to raise a Series A right now | TechCrunch

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    There is good news and just “OK” news.

    The good news is that the venture capital market is showing signs of stabilizing. The bad news is that raising a series A will continue to be difficult for founders, especially as venture firms face liquidity problems, higher interest rates, and pressure from their limited partners to be more cautious in their dealmaking.

    In 2020, TechCrunch+ reported that founders should start fundraising when they have at least six months of runway left and that they should budget fundraising to last at least three months, with a one-month prep time to a two-to-six week pitch process with investors.

    Today, Jesse Randall, the founder of the platform Sweater Ventures, said founders should start looking to raise a Series A when they have about 12 to 15 months of cash runway left.

    “Don’t wait any longer than that,” he told TechCrunch+. “The fundraising cycle, once you start it, takes twice as long and requires three times the conversations.”

    Leslie Feinzaig, founder of Graham & Walker, says she primarily invests in pre-seed and seed rounds but tells her founders they should start focusing on their business at least 12 to 18 months before fundraising a Series A. This includes understanding their business model, connecting with the proper investors, and stress testing their readiness. The advice investors gave for a Series A this year shows how little and how much everything has changed in the market: Metrics will always be important, but starting early for this longer journey is key.

    “In this market, you have to prep for an A way in advance,” Feinzaig told TechCrunch+, adding that it could be fruitful to do so right after closing a seed round. “Time goes by fast, and in my experience, this catches a lot of founders unaware. Focus on your metrics immediately.”

    It’s an investor market out there

    This year is set to be much different than last year, Randall said.

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    Dominic-Madori Davis

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  • Funding for female founders remained consistent in 2023 | TechCrunch

    Funding for female founders remained consistent in 2023 | TechCrunch

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    Female-founded companies in the U.S. raised $44.4 billion out of the $170.59 billion in venture capital allocated last year. Companies with founding teams that are all women raised around $3.1 billion — or 1.8% — which is a dip from $5.1 billion (2.1%) in 2022 and from the $7.3 billion (also 2.1%) raised in 2021’s bull market.

    In fact, this is the lowest percentage of venture capital allocated to such teams since 2016, when they picked up 1.6% of all venture funds. There is good news for mixed-gender founding teams, however. Such teams raised 26.1% of all venture capital allocated this year, a sizable jump from the 18.2% they picked up last year. This follows the pattern that women founders still fare better with a male co-founder in the mix.

    Kyle Stanford, lead VC analyst at PitchBook, told TechCrunch+ that it’s difficult to pinpoint a single reason why funding to women founders has dipped a bit, but he added that the decline in deal counts for women founders follows the trends of the broader market. Otherwise, he said, data shows there is still a long way to go before the market is seen as equitable.

    “Venture has had several tough years, and capital availability in the market has declined significantly. In general, the VC market saw declines of nearly 20% in deal count and 50% in deal value between 2021 and 2023,” he said. “That is not meant to make activity in female-founded companies look better, but the context of market difficulties is important.”

    Overall, less than 25% of all deals went to female-founded companies in 2023. The most popular category was software, where around $8.4 billion was invested, followed by B2B, SaaS, and pharmacy and bio. New York City takes the top spot for where women receive the most deals, followed by San Francisco and Los Angeles.

    “While it has been a large market for a while, it is beginning to close the gap with the Bay Area in terms of investment count activity,” Stanford said. “New York has become a great market for founders of all types, and right now that is showing through its high VC levels in female-founded companies.”

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    Dominic-Madori Davis

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  • Ask Sophie: What changes are in store for PERM? | TechCrunch

    Ask Sophie: What changes are in store for PERM? | TechCrunch

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    Sophie Alcorn
    Contributor

    Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.
    More posts by this contributor

    Sophie Alcorn, attorney, author and founder of Alcorn Immigration Law in Silicon Valley, California, is an award-winning Certified Specialist Attorney in Immigration and Nationality Law by the State Bar Board of Legal Specialization. Sophie is passionate about transcending borders, expanding opportunity, and connecting the world by practicing compassionate, visionary, and expert immigration law. Connect with Sophie on LinkedIn and Twitter.

    TechCrunch+ members receive access to weekly “Ask Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.

    Dear Sophie,

    Our HR and operational consulting firm works primarily with tech startups. Would you provide an update on what we should look out for in the new year when it comes to the PERM process? Thanks!

    — Hopeful HR

    Dear Hopeful,

    Happy New Year! I’m excited about what 2024 will bring in immigration policy changes designed to attract and retain international talent in STEM fields, particularly those spurred by President Biden’s executive order on AI.

    If you haven’t already, talk with an immigration attorney about the complex PERM process, timing, risks and alternative options based on a company’s hiring situation and an employee’s immigration situation.

    Now, let me provide a bit of context about where things currently stand with the PERM process before diving into the changes you should look out for that will — or will not 🙂 — impact PERM.

    The current state of PERM

    As you know, getting PERM labor certification from the U.S. Department of Labor (DOL) is the first step required for companies sponsoring current or prospective employees for an EB-2 advanced degree or exceptional ability green card or an EB-3 green card for professional workers. The PERM process aims to protect wages for Americans and establish that any qualified and available U.S. workers receive access to the job prior to offering a green card to the candidate.

    If you’d like additional detail about the nuts and bolts of the PERM process, take a look at this previous Ask Sophie column.

    In general, PERM requires employers to:

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    Carrie Andrews

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  • Seed to Series A: Strategic insights for tech founders in the 2024 venture landscape | TechCrunch

    Seed to Series A: Strategic insights for tech founders in the 2024 venture landscape | TechCrunch

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    Mike Cardamone
    Contributor

    Mike Cardamone is CEO and managing partner at Forum Ventures, where he focuses on developing Forum’s investment strategy with the mission to make the B2B SaaS journey easier, more accessible, and successful for early-stage founders.

    There is no question that 2023 was a tough year for the venture and tech ecosystem. Carta revealed a dramatic decline in funding rounds and total investment, showing the total number of rounds in Q1 2023 dropping 64% and the total dollars invested dropping 86% from the peak in Q4 2021. Forum Ventures has seen firsthand how difficult the fundraising environment is for founders at all stages of this market, having invested in 100+ B2B SaaS companies this year across their accelerator and seed funds. Michael Cardamone, CEO and managing partner at Forum Ventures, spoke to emerging managers about the state of this market and reflected that “this is the hardest it has been to raise a fund in a long time.”

    In a recent report, Forum Ventures surveyed 70 funds and analyzed data from 167 closed pre-seed and seed rounds between January and October 2023 to provide a comprehensive overview of the current state of the early-stage B2B SaaS investment landscape.

    A few key findings from that report:

    • 75% of respondents noted a decrease in valuations since 2022 and the data across these rounds showed a 10% decrease from the same survey conducted last year.
    • Mean valuations at pre-seed were $9 million post and that held true for pre-revenue through $250,000 in ARR (annual recurring revenue) across the rounds data was collected from.
    • Companies with $250,000 in ARR or higher raised at a mean valuation cap of $15 million.

    Seed rounds

    As a founder, be smart in managing your cash flow, convince great people to join your company, and focus on building a product that your customers crave.

    Seed valuations have remained steady through 2022 and 2023, yet achieving the necessary traction for these rounds has become more challenging, which can create misaligned expectations for founders. In 2020–2021, it was relatively common for $3 million to $5 million seed rounds to get done with very little, if any, traction, and they were typically getting done at $12 million to $25 million valuations, depending on the space and the founders’ background.

    There are exceptions, but today’s market demands substantial early traction where companies typically need $250,000 to $1 million in ARR to raise a $3 million+ seed round and these rounds are usually getting done at approximately 20% to 25% dilution (i.e., $3 million at $12 million to $15 million post or $4 million at $16 million to $20 million post). The bar is much higher to raise an institutional seed round, and a founder/company often needs to prove a lot more in today’s market than they used to. This dynamic means that many founders have to first raise a pre-seed round to get to those milestones and therefore raise multiple rounds to get to a Series A.

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  • AI makes you worse at what you’re good at | TechCrunch

    AI makes you worse at what you’re good at | TechCrunch

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    Welcome to Startups Weekly. Sign up here to get it in your inbox every Friday.

    If you’ve been following along with this newsletter, you’ll have noticed that I’ve been a little bit curious about AI — especially generative AI. I’m likely not the first person to make this observation, but AIs are extremely, painfully average. I guess that’s kind of the point of them — train them on all knowledge, and mediocrity will surface.

    The trick is to only use AI tools for stuff that you, yourself, aren’t very good at. If you’re an expert artist or writer, it’ll let you down. The truth, though, is that most people aren’t great writers, and so ChatGPT and its brethren are going to be a massive benefit to white-collar workers everywhere. Well, until we collectively discover that a house cleaner has greater job security than an office manager or a secretary, at least.

    On that cheerful note, let’s sniff about in the startup bushes and see what tasty morsels we can scare up from the depths of the TechCrunch archive from the past week. . . .

    Okay, fine, let’s start with AI

    Image Credits: Kirillm (opens in a new window) / Getty Images

    I know, this happens every damn week: I start with the intention of writing this newsletter without going up to my eyelashes into the AI morass, and every week, y’all keep reading our AI news as if your livelihood depends on it. Because, well, it’s entirely possible it does, I suppose.

    The GPT Store, introduced by OpenAI, enables developers to create custom GPT-based conversational AI models and sell them in a new marketplace. This initiative is designed to expand the accessibility and commercial use of AI, similar to how app stores revolutionized software distribution. Developers can not only build but also monetize their AI creations, opening up a new avenue for innovation and entrepreneurship in the field of artificial intelligence. Of course, that little update — and the platform now natively being able to read PDFs and websites — is a substantial threat to startups that had previously filled this gap in ChatGPT’s offerings, especially those whose business models are based on such features. It’s a reminder that building a business around another company’s API without a sustainable, stand-alone product is, perhaps, not the shrewdest business move.

    AI is, of course, not just for startups. During Apple’s Q4 earnings call, the company’s CEO, Tim Cook, emphasized AI as a fundamental technology and highlighted recent AI-driven features like Personal Voice and Live Voicemail in iOS 17. He also confirmed that Apple is continuing to develop generative AI technologies — tellingly, without revealing specifics.

    Heinlein would be horrified: Elon Musk announced that Twitter’s Premium Plus subscribers will soon have early access to xAI’s new AI system, Grok, once it exits early beta, positioning the chatbot as a perk for the platform’s $16/month ad-free service tier.

    Brother, can you spare a GPU?: AWS introduced Amazon Elastic Compute Cloud (EC2) and Capacity Blocks for ML, a new service that enables customers to rent Nvidia GPUs for a set period, primarily for AI tasks like training or experimenting with machine learning models.

    From zero to AI founder in one easy bootstrap: In “How to bootstrap an AI startup” on TC+, Michael Koch advises founders on maintaining control over their startup’s strategy and product by bootstrapping — yes, even in the oft-capital-intensive world of AI startups.

    The rocky ocean of venture-backed startups

    An illustration depicting the Wework logo looking battered and wearing bandages, meant to suggest financial hardship

    Image Credits: Darrell Etherington with assets from Getty under license

    WeWork, once a high-flying startup valued at $47 billion, has filed for Chapter 11 bankruptcy protection, highlighting a staggering collapse. The company, which has over $18.6 billion of debt, received agreement from about 90% of its lenders to convert $3 billion of debt into equity in an attempt to improve its balance sheet and address its costly leases. On TC+, Alex notes what we kinda knew all along: that the core business just didn’t make sense.

    In other venture news . . .

    Ex-Twitter CEO raises third venture fund: 01 Advisors, the venture firm founded by former Twitter executives Dick Costolo and Adam Bain, has secured $395 million in capital commitments for its third fund, aimed at investing in Series B–stage startups focused on business software and fintech services.

    Happy 10th unicornaversary: Alex reflects on the tenth anniversary of the term “unicorn,” which was initially coined right here on TechCrunch, to describe startups valued at over $1 billion.

    You get a chip! You get a chip!: In response to a shortage of AI chips, Microsoft is updating its startup support program to offer selected startups free access to advanced Azure AI supercomputing resources to develop AI models​​.

    Let’s talk Sam Bankman-Fried

    Illustration of Sam Bankman-Fried aka SBF

    Image Credits: Bryce Durbin / TechCrunch

    Look, I’m not going to lie, I think most crypto is dumb, and I’ve seen only a handful of startups that use blockchains in a way that makes any sense whatsoever — most of them would have done just fine with a simple database — so I’ve been following Jacquelyn’s coverage of Bankman-Fried’s trial with a not insignificant amount of schadenfreude. It’s human to make mistakes, and startup founders are human, but if you’re defrauding the fuck out of people, you deserve all the comeuppance you can get.

    Sam Bankman-Fried was the co-founder and CEO of the cryptocurrency exchange FTX and the trading firm Alameda Research (named specifically to not sound like a crypto company). He has been found guilty on all seven counts of fraud and money laundering.

    The charges were related to a scheme involving misappropriating billions of dollars of customer funds deposited with FTX and misleading investors and lenders of both FTX and Alameda Research. After the five-week trial, the jury spent just four hours to reach its verdict.

    The collapse of FTX and Alameda Research, which led to the indictment of Bankman-Fried about 11 months ago by the U.S. Department of Justice, was significant, with the executives allegedly stealing over $8 billion in customer funds.

    Sentencing will happen next March, but if he gets smacked with the full weight of his actions, he will face a total possible sentence of 115 years in prison.

    Jacquelyn did a heroic job covering the trial for TechCrunch, and it’s worth taking an afternoon to read through it all — the details are mind-boggling.

    Top reads on TechCrunch this week

    The house sometimes wins: Mr. Cooper, a mortgage and loan company, experienced a “cybersecurity incident” that led to an ongoing system outage. The company says it has taken steps to secure data and address the issue​.

    Can’t think of any downsides of the Hindenburg: The world’s largest aircraft, Pathfinder 1, is an electric airship prototype developed by LTA Research and funded by Sergey Brin. It was unveiled this week, promising a new era in sustainable air travel.

    Arrival’s departure: The EV startup Arrival, which aimed to revolutionize electric vehicle production with its micro-factory model, is now facing severe operational challenges, including multiple layoffs, missed production targets, and noncompliance with SEC filing requirements, resulting in a plummet from a $13 billion valuation.

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    Haje Jan Kamps

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  • International Venture Capitalist and Founder/CEO of TrüNorth Global and Waystone Capital Comes Home to Invest and Reimagine Hometown

    International Venture Capitalist and Founder/CEO of TrüNorth Global and Waystone Capital Comes Home to Invest and Reimagine Hometown

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    Press Release
    –

    Nov 4, 2022 10:00 EDT


    CHARLOTTE, N.C., November 4, 2022 (Newswire.com)
    –
    William Kirk Eskridge, born and raised in Sturgis, Mississippi, is currently building Highland Oaks, an event, festival, and music venue on property close to his childhood home in Sturgis. Eskridge’s goal is to invest in and reimagine the American small town.

    Eskridge’s development group is looking to add businesses to the area for the local community. All venues and businesses will be dedicated to giving back to local charities and business development in the area. 

    When asked why he was doing this, Eskridge stated, “I am looking to give back to the area where I grew up, and when thinking about my childhood, I wish I would have had places to go like what we are looking to build when I was a child.” 

    Eskridge’s mother, June; his brother, Lance; and additional family also live in the area. Eskridge’s companies have offices in over 60 countries, but he and his family reside in the Carolinas. Eskridge states, “I will not be moving back to the area; however, I will be flying into Sturgis and Starkville’s Bryan Field more often to attend festivals, and music events, and spend time with family.” 

    Much focus will be on charitable events, such as fishing rodeos, outdoor concerts, movies, fall and summer festivals, and so on. Some of the features will include multiple areas for families and individuals to walk, play games, paddle board, and kayak, with fields for games and fire pits. Eskridge’s vision for Sturgis is to rebuild the small town into a Norman Rockwellian-style American throwback with small unique stores and restaurants, bringing life into the American small town. 

    Eskridge says, “My goal for the area is to be a regional draw, not a pass-through and give the citizens a reason to buy local and create jobs while drawing others to what will be a fantastic little piece of Americana.” 

    Highland Oaks is scheduled to officially open in the Spring of 2023. For more information, visit www.thehighlandoaks.com. 

    For inquiries and proposal requests, please contact:

    Kaitlyn Rogers, Global Director of Operations, 1.800.903.7489

    Source: TrüNorth Global

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  • Colorcast Raises $3.5M Seed Round; Inks Deals With Major Sportsbooks

    Colorcast Raises $3.5M Seed Round; Inks Deals With Major Sportsbooks

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    Led by Austin-Based Next Coast Ventures, Colorcast’s Seed Round includes follow-on investments from Tribeca Early Stage Partners, Capital Factory, VoicePunch, Hilltop Venture Partners, eon Capital Venture Fund, Connetic Ventures, and HBS Angels.

    Press Release
    –

    Jun 7, 2022


    AUSTIN, Texas, June 7, 2022 (Newswire.com)
    –
    Colorcast has closed a seed round of $3.5M from Austin-based Next Coast Ventures, New York-based Tribeca Early Stage Partners, Dallas-based Capital Factory, Los Angeles-based VoicePunch, Denver-based Hilltop Ventures Partners and eon Capital Venture Fund, San Francisco-based Connetic Ventures, and Chicago-based Harvard Business School Angels, among others. At the same time, Colorcast has inked affiliate partnership deals with major sports books including BetMGM, Caesars, PointsBet, and others, whereby Colorcast’s users will be able to place bets on their sports book of choice without ever leaving the app.

    Colorcast is a Social Sports Talk App that allows anyone, anywhere, with no equipment, to commentate on live sports, before, during, and after the game. Colorcast provides “casters” and listeners with stats, scores, betting odds, and other real-time information about the game. Casters and listeners interact with each other via text chat or via the “Hot Seat,” where listeners are brought onto the microphone and given a chance to ask questions or share their own hot sports takes.

    Now, with the NFL season quickly approaching, Colorcast is planning a bold move into the sports betting space with the support of major sportsbooks, 20+ years of in-house sports betting experience, and a world-class community of users. “Colorcast has always been about fan engagement,” stated Co-Founder and CEO, Evan Kirkham. “We’ve made sports more accessible and engaging for tens of thousands of sports fans with our social sports talk product. Sports betting is the next frontier of fan engagement and there are some serious accessibility problems that we believe our team is uniquely positioned to solve.”

    Next Coast Ventures’ Managing Director, Mike Smerklo, stated that he believes that because of “their proprietary technology and ease of use, Colorcast is changing the way we interact with live TV, and, by extension, other sports fans. We’re excited to partner with the Colorcast team given their track record of executional excellence and maniacal focus on fan engagement.”

    Tribeca ESP’s Managing Partner, John McEvoy seconded Smerklo’s sentiments: “We are doubling down on our bet. The speed at which the Colorcast team iterates is seriously impressive. I have every reason to believe they will be able to address problems in the sports betting industry like widespread confusion around betting terminology, uninformed decision making, and bettors’ inability to articulate or improve on their strategy, in the same way that the team solved for the lack of engagement resulting from genericized network broadcasting.”

    To learn more about Colorcast, visit Colorca.st, follow Colorcast on social media (@Colorcastapp), or simply download the app from the Apple App Store.

    For media inquiries, please contact Press@Colorca.st.

    Source: Colorcast, Inc.

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  • AirSkirts Opens Seed Round to Accelerate Growth

    AirSkirts Opens Seed Round to Accelerate Growth

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    Press Release
    –

    Jan 26, 2022


    MONTVILLE CENTER, Conn., January 26, 2022 (Newswire.com)
    –
    AirSkirts today announced a seed funding round to accelerate the growth of its innovative lineup of inflatable RV skirt kits. Unlike traditional skirting methods that require drilling dozens of holes into the RV or messy DIY solutions, AirSkirts® is the first-ever inflatable RV skirt system to insulate campers. As the only skirting solution retailers can sell off-the-shelf, AirSkirts®’ inflatable design succeeds where other skirting methods fail — providing a durable, easy-to-install insulation solution that is resistant to extreme weather. The modular design makes year-round RV life possible and fits any travel trailer, motorhome, fifth wheel or tiny house.

    “Support from investors will help us take things to the next level. Together, we can bring much-needed climate tolerance solutions that will last for decades to the rapidly growing RV community,” said Jim Phelan, founder and Managing Director of AirSkirts. “I created AirSkirts after several frustrating seasons in my Airstream and I’m convinced it offers the best protection for your RV.”

    Historically, RVers had limited and often time-consuming options to skirt their trailers. AirSkirts® has changed the game with the world’s only inflatable design for year-round RV living that is installation-free and can be retailed at scale. The robust kit creates a large barrier of trapped air between two layers PVC that acts as an insulator. This prevents freezing pipes, retains heat, gives RVers warmer floors and saves on energy. Kits set up in under 30 minutes with ultra-durable, military-grade construction that requires no drilling of holes or messy homegrown solutions.

    As the pandemic supercharged the RV lifestyle into a $20 billion industry, AirSkirts® propelled onto the scene at just the right time. The bootstrapped start-up’s explosive growth combined with energy from new investors is setting up the company for the long haul. With over 11 million American households owning an RV and 1,000+ satisfied AirSkirts® customers around the U.S., the family owned and operated company aims to offer fresh products to support the RV lifestyle. Funding will be utilized to make inventory more robust, improve production and shipment logistics, and expand product development and marketing efforts.

    To participate in this seed round, go to www.fundable.com/airskirts. For more information about AirSkirts, head to www.airskirts.com and check out the full lineup of skirting kits and components here. Follow @airskirts on social media.

    ABOUT AIRSKIRTS:

    In January 2020, Jim Phelan founded AirSkirts after several frustrating seasons with traditional skirting methods. A software architect by trade, he sold his home in Brooklyn, New York, and most of his possessions in 2016, and began living and traveling in his Airstream. AirSkirts’ one-of-a-kind, patent-pending system prevents frozen pipes so you stay warmer, saves on energy costs, requires no installation, and fits any camper, RV, Fifth Wheel, travel trailer or motor coach. The family owned and operated small business is headquartered in Oakdale, Connecticut. The start-up is dedicated to creating cost-effective, innovative solutions for RVers.

    MEDIA CONTACT:
    Taryn Hennebique
    taryn@tmlpublicrelations.com

    Source: AirSkirts

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