Startups Weekly: Let’s see what those Y Combinator kids have been up to this time
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Itâs the most wonderful tiiiiiiime of the yeaaaaaaar ⊠Thatâs right, weâre back with all the you-canât-miss companies from the current batch of Y Combinator startups. AI was, not shockingly, the biggest theme, with 86 out of 247 companies calling themselves an AI startup, but weâre reaching bubble territory given that 187 mention AI in their pitches. We have a couple of roundups for you, including the 18 most interesting, and the TechCrunch staff favorites.
Meanwhile, I wrote up an in-depth interview with the founder of Ember, the hot-mug company, about (among other things) how he split his company in half to be able to woo MedTech and life sciences investors.
Most interesting startup stories from the week
Startups losing money is nothing new, but this week, Devin summarizes why Trumpâs Truth Social is different in a few key ways. In a nutshell, the whole thing is playing out like a bad reality TV show, where the plot revolves around hemorrhaging money and the suspense is whether itâll run out of cash before viewers change the channel. With a debut on Nasdaq as $DJT, thanks to a merger with the desperation darling of the finance world, a SPAC, Trump Media & Technology Groupâs (TMTG) financial lifting of the veil reveals a $58 million loss on a meager $4 million in revenue. This isnât your typical Silicon Valley âburn cash now, profit laterâ saga; itâs more of a âburn cash now, and thatâs itâ kind of story. Unlike startups that thrive on VC life support while disrupting industries, TMTGâs lifelines are fraying, with no explosive user growth, no VC sugar daddies, and the unenviable position of being publicly accountable while trying to juggle a business model that seems to repel advertisers like itâs made of antimatter. As the stock flops around lacklusterly, the reality sets in that TMTGâs story might be less about pioneering digital media and more about how to lose friends and alienate advertisers, all while the credits roll on what could be the most expensive episode of âThe Apprenticeâ ever produced.
- IPOs are gathering steam ⊠maybe?: Cybersecurity darling Rubrik, which has been guzzling venture capital like itâs going out of style, has decided itâs time to brave the public markets and files for an IPO. With a history of bleeding money, Rubrikâs tale is one of modest revenue growth, eye-watering losses, and a pivot to subscription models thatâs as groundbreaking as deciding to sell software as a service in the tech world.
- Accel rethinks India:Â Accel, the venture capital firm thatâs been collecting Indian unicorns like theyâre going out of style, is having a bit of an existential crisis with its Atoms accelerator program, realizing that in the eyes of founders, all VC money eventually starts to look the same â just a pile of cash with strings attached.
- Crypto is back?:Â If the 2023 crypto venture landscape was an ice-cold pot of water, the first quarter of 2024 is the part where the bubbles start to form right before water boils, Tom Schmidt, a partner at Dragonfly Capital, said to TechCrunch in Jacquelynâs overview of the VC investment space for crypto.
Chaos in automotive startup land
Stormy weather continues to be the theme for the movers and shakers of the startup world: Transportation.
Canooâs 2023 earnings report reads like a tragicomedy. The star of the show? CEO Tony Aquilaâs private jet, which cost the company double its entire revenue for the year. In a year where Canoo managed to rake in a meager $890,000 by delivering just 22 vehicles, it simultaneously shelled out $1.7 million to ensure Aquila could jet-set in style. I guess in the fast-paced world of electric vehicles, nothing says âfiscal responsibilityâ quite like a private jet tab that overshadows your sales, even as the company picks clean the bones of its failed competitors.
Meanwhile, in the land of Fisker, the company momentarily misplaced millions in customer payments amid a frantic scramble to restructure its business model. This financial game of hide-and-seek, which diverted crucial resources from sales to sleuthing, highlights the companyâs rather casual approach to tracking transactions, including, in some instances, handing over vehicles on the honor system. Fiskerâs attempt to play catch-up with paperwork not only strained its relationship with PwC during annual report preparations but also left the company clueless about its actual revenue, all while teetering on the edge of bankruptcy. So, if youâve ever felt bad about losing your car keys, at least take solace knowing you didnât misplace the equivalent of a whole SUV stuffed full of dollar bills, or get yourself into an investigation about why the doors on the cars you manufacture wonât open.
- Self-driving ⊠into the abyss: Ghost Autonomy, a startup that once dreamed of making highways safer with its autonomous driving software, has ghosted the automotive world, shutting down operations despite a nearly $220 million séance with investors.
- Riveting reading from Rivian: Rivianâs latest report card reads more like a cry for help than a victory lap. The EV underdog kicked off 2024 by building a smaller number of cars and delivering even fewer. With each EV sold last quarter costing them the equivalent of a luxury sedan in losses, Rivianâs journey to profitability looks ⊠interesting.
- Tesla takes a dip: Teslaâs latest delivery figures are so-so, as the company blames everything from arsonists with a vendetta against German factories to maritime mayhem courtesy of the Houthi rebels for its first year-over-year sales dip in three years. As if transitioning to the new Model 3 wasnât enough of a speed bump, Teslaâs also juggling production of the Cybertruck and a mysterious lower-cost EV, all while trying to invent a revolutionary manufacturing process on the fly.
Most interesting fundraises this week
Kidsy is the latest brainchild to emerge from the startup nursery. The company is essentially the T.J. Maxx of baby gear, swooping in to save parents from the financial black hole that is raising children by offering discounted, overstocked, and gently used items that were once destined for the landfill. Founded by a former business journalist and a software engineer, Kidsy has quickly become the superhero of the circular economy for baby products, managing to charm investors into an âoversubscribedâ pre-seed funding round faster than a toddler can throw a tantrum.
- A sticky startup indeed:Â Stripe, the payments behemoth, has swooned over a four-person startup named Supaglue, formerly known as Supergrain, in a classic tale of acqui-hire romance. Supaglue somehow caught Stripeâs eye â perhaps through the tech equivalent of a love potion mixed with mutual acquaintances and serendipitous meetings.
- Google blesses nonprofits with $20 million: Google.org is throwing $20 million at nonprofits to play fairy godmother to their AI dreams. Twenty-one lucky nonprofits get to be the guinea pigs in a six-month tech boot camp, complete with AI coaches and Google employee minions, all in the name of making the world a better place â one automated task at a time.
- Bla bla bla something something cars: From its humble beginnings as an online hitchhiking platform to becoming a unicorn with a penchant for hoarding millions and dabbling in buses, BlaBlaCar has had quite the ride. Now armed with a $108 million credit line and a newfound taste for profitability, itâs on a shopping spree for smaller companies.
Other unmissable TechCrunch stories âŠ
Every week, thereâs always a few stories I want to share with you that somehow donât fit into the categories above. Itâd be a shame if you missed âem, so hereâs a random grab bag of goodies for ya:
- No account required:Â OpenAI, in a move that screams âdata is the new gold,â is now letting anyone chat with ChatGPT without an account, ensuring that even your grandmaâs queries about knitting patterns can help train their AI, all while vaguely hinting at âmore restrictive content policiesâ that are as clear as mud.
- Just bumblinâ along: Bumble, once the belle of the IPO ball, now finds itself grappling with the modern dating dilemma of being ghosted by users for TikTok love stories. New CEO Lidiane Jones is on a mission to rekindle the flame by rethinking the womenâs first-move mantra and flirting with AI, all while trying to make dating fun again without really changing the swipe-right culture.
- Hey, thatâs a good impression of me: OpenAI is basically saying âhold my beerâ as it dives headfirst into the ethical quagmire of voice cloning with its new Voice Engine. The company insists itâs all about responsible innovation while simultaneously opening Pandoraâs box to see how it can be used and abused. We canât think of a single downside.⊠</sarcasm>
- B nixes AI: BeyoncĂ©âs âCowboy Carterâ has been out for only a few days. But in the middle of the press release for âCowboy Carter,â the singer made an unexpected statement against the growing presence of AI in music.