This is a transcript of the latest episode of Equity, TechCrunch's venture capital-focused podcast. New episodes of Equity air every Monday, Wednesday, and Friday.
To catch up on Wednesday's show, listen above or read below. On this show, we discuss the week's major startup and venture capital news.
transcript
0:10
Hello. Welcome to the TechCrunch podcast Equity. In this podcast, we unpack the numbers and nuances behind the headlines. Today is February 14, 2024. Happy Valentine's Day. Eat some chocolate and relax on the couch. Because you are worth it.
This is our Wednesday show, where we dig into the week's most important startup and venture capital stories. Today's pod has a list of absolutely killer things. I can't wait to talk about it.
We start with Brett Taylor's new startup Sierra and why FlowFi wants to combine talent and technology. Then there's the venture capital round from Fold and Antithesis. And I end my coverage of the startup by asking why everyone wants me to eat more mushrooms. Venture Corner has the latest news from Homebrew, Foundry, and Europe. Alright, let's go!
1:00
To kick off our article on startups, today we would like to talk about some of the best known people for their work in the Big Tech field. That's Brett Taylor. He is a former Google Maps guy who founded Friendfeed and later became his CTO at Facebook. He then founded Quip and became co-CEO of Salesforce. He is a former director of Twitter, and currently he is a director of OpenAI. And he's starting a new company called Sierra.
So what is Sierra doing?Well, it's under construction conversational AI agent, is essentially a piece of artificial intelligence that does something for the end user, such as asking a question or updating an account. The AI agent space is busy, but Sierra has already raised $110 million to bring the product to market. So the company appears to have a well-backed strategy to dominate the growing software niche market, with significant capital, early customers, and perhaps even early revenue.
But I'm working in a more hands-on way than I expected.the Create software tools for customersrather than just giving them a big bag of stuff for them to assemble themselves.
The joke here is, if you want to raise money right now, start an AI startup.But if you Really I'd like to raise money today to build an AI startup, which I'm also on OpenAI's board of directors. Fortune reports that Sierra uses both closed AI models (also known as OpenAI) and open-source AI models, chaining them together to avoid hallucinations and ensure that AI agents actually perform tasks for customers. We support you to do so. Chained LLMs may become a trend.
2:36
Next, FlowFi I think this is a really attractive startup.that's all Raised $9 million from Blumberg Capital. But the way the company pursues the startup financial management market really pisses me off.
So there's a big movement now to use AI to do things that humans can do as often and as quickly as possible. The logic here is very simple. Computer agents are much cheaper than human workers. Replacing the latter with the former also makes sense from a business perspective. But FlowFi is building his suite of software for startup finance, combined with a marketplace of live humans helping customers book their books. So instead of building software with AI added, we're building software plus humans.
And frankly, in this case, you get it. You don't want your CFO to become a bot. You're looking for a grizzled, experienced guy who will give you that famous CFO look when you make a stupid mistake or spend too much on a business dinner. That's the kind of person I am. So the company offers accounting assistance, CFO-like services, and tax preparation assistance through software alone. and Humans are at the helm. he's very cool But let's see how it scales.
3:47
So much happened this week. I needed to summarize some things, but I would like to go to more companies. So let's start with bold. Just raised $50 million, and working on payments in Latin America. So this is a big fintech round in a region that used to be completely crazy for fintech, and given the venture setbacks we've seen in Latin America, and in fintech more generally, the bold Great to see funding raised for this project. teeth. Bold is a welcome light for many other Latin American fintech companies looking to raise more capital for themselves. If you remember, last Friday on the show, we talked a lot about what startups in Latin America are like. Improved efficiency through several key metrics than those in other regions. So maybe the VCs here are seeing that and leveraging their checkbooks where they can have the most impact.
4:35
Next up is a company called Antithesis. Just raised $47 million For automated software testing services. I chose this one because I think it's pretty cool. The reason is that everyone agrees that software is the future of the world. However, actually writing code that is safe, reliable, and stable is not easy. This can be compared to writing and editing. Both are needed to create a great final product. In short, Antithesis has built a lot of tools to help you run your code very well. There's obviously a lot of competition, especially in the startup world. But I don't think you can get this much money in today's market unless your numbers are top notch. Antithesis, a remarkable work.
5:20
Why does everyone want me to eat mushrooms at the end of a startup interview? Actually, it's getting kind of weird. This time, A startup called Spacegoods — All in one word. The London-based wellness brand wants to create a line of powder-he blends using mushrooms and nootropics. According to TechCrunch, the company's products claim to boost my energy, relaxation, and mood. I can certainly say that. Other startups are using mushrooms to make faux leather, protein-based foods, and energy drinks. Apparently mushrooms can do anything. And that means the people who wrote this spread were right. I think we should all be on the lookout for bottles of mushroom whiskey that are bound to come out.
6:04
From startups to venture capital, here's our first VC story this morning. Homebrew targets $50 million in new fund. venture capital firm Homebrew; You've probably heard of it. The company is raising $50 million for the new fund, according to SEC filings. And the filing actually comes as a bit of a surprise, as Homebrew said nearly two years ago that it was pursuing a more stage-agnostic, evergreen model funded solely by partners Satya Patel and Hunter Walk. Ta. So what should we think about this news? Here are some ideas. It could perhaps be an opportunity fund, or it could be a highly tailored vehicle for a large follow-on investment in a previous transaction.
If Homebrew is able to self-fund, its previous funding has been very successful. So even though the main funding will be raised internally, people may want to co-invest a little bit in it. Can you imagine a fund's LP meeting that is fully supported by its own general partner anyway? It's like, “Hello, good morning.” How did this quarter turn out so well? Okay, meeting adjourned. ”
7:13
But if Homebrew is reloading, Foundry Group will walk away. Foundry is an 18-year-old venture capital firm with approximately $3.5 billion in assets under management.and it is Decided to quietly close down and not raise any more funds.. The move surprised TechCrunch, as the company announced $500 million in funding last year.
Over the years, Foundry has invested in more than 200 companies and 50 venture capital firms. According to co-founder and partner Seth Levine: Foundry is a household name, having backed companies like Fitbit and Zynga. But Mr. Levine wrote in his post, which I quote: “Venture capitalists rarely make decisions like this, but this is exactly what we planned to do when we started The Foundry in 2006. I had deliberately decided not to build a “firm.'' ”
In a way, this feels refreshing. Do something for a while, make a lot of money, and then move on. It feels strangely clean, especially considering what we've seen at other venture capital firms. A major generational change or handover can be disruptive. But don't worry, Foundry still has investment money left over from its last fund and just has no intention of raising another fund.
8:30
Finally, as reported by our own Anna Heim, Germany-based Early Bird Health Putting together the final close of the second fundThis is expected to be worth €173 million or approximately US$185 million. This is actually more than twice the size of earlier seed funds focused on healthcare. The fund, very creatively named health one, was worth around €85 million at final appraisal. closure. So while both funds are similar in both paper and stage, the larger new fund allows early birds to write bigger checks. Who wouldn't want a little more ownership? Earlybird also intends to invest primarily in Europe, including the UK, so its new fund could be good news for medical technology startups in the region. The very public downfall of telemedicine company Babylon.
9:23
That's what this fun Wednesday morning show is all about. I'll hug you. I hope you are well.
We'll have more on this Friday, but in the meantime, we're equitypod on X and Threads, and we're TechCrunchpod on Tiktok.
In the meantime, I highly recommend watching both of our sister shows.it is Chain reaction Cryptobeat and found We talk to founders about how they built what they did. Okay. I'm Alex, I'll talk to you in a moment. good bye.
Equity is hosted by me, Alex Wilhelm, and TechCrunch Senior Reporter Mary Ann Azevedo. Produced by Teresa Loconsolo and edited by Kel. Bryce Durbin is an illustrator. Many thanks to Henry Pickavet, who manages the Audience Development team and the TechCrunch audio products. Thank you for your attention. I will talk to you again next time.