Welcome to Startups Weekly, your weekly roundup of must-see stories from the startup world.
This week's most interesting startup stories
Shortly after Google parent Alphabet reportedly abandoned plans to acquire online marketing software company HubSpot, the tech giant has decided to pursue another big acquisition. This time, Google is in talks to pay $23 billion for Wiz, a cloud security startup that's experiencing phenomenal growth. Just four years old, Wiz has already hit $500 million in annual recurring revenue (ARR), TechCrunch learned exclusively this week.
Google's offer exceeds Wiz's previous market cap of $12 billion, but would the giant agree to sell itself now and give up on its IPO dreams? A person close to the company told us there's a 50% chance the deal won't happen.
SoftBank eyes AI: The Japanese giant has acquired Graphcore, a UK-based AI chipmaker that was once considered a rival to Nvidia, for an undisclosed sum. Though Graphcore's processors are nowhere near as popular as Nvidia's, SoftBank hopes the chipmaker will play a big role in its quest for AI profits.
New Deal for Deel: Payroll provider Deel has been on an M&A spree, acquiring two more companies this year and this week buying Hofy, a startup that delivers and manages equipment for remote office workers. Deel is believed to have paid more than $100 million for Hofy, which has raised $30.2 million in VC funding.
Shocking sale: In 2018, investors hailed HeadSpin as “one of the fastest-growing software companies of all time.” By 2020, the company was valued at $1.1 billion. The startup's founder then pleaded guilty to inflating HeadSpin's revenue and went to prison for fraud. HeadSpin was recently acquired by private equity firm PartnerOne for just $28 million, and most of its former employees received nothing for their options, according to information obtained by TechCrunched.
Finding a job can be tough, but it can be especially difficult for people with disabilities, which is why disability activist Keeley Cat Wells founded Making Space, a talent acquisition platform for disabled workers. But finding investors for her startup wasn't easy.
A potential investor advised Cat Wells to find a male cofounder without a disability. She ignored the suggestion and raised a $2 million pre-seed round from Utah-based venture capital firm Beta Boom.
AI Search: Google helps humans search the internet. AI platforms also want to search the internet, but on a much larger scale. Exa, which has raised $17 million from Lightspeed, Nvidia, and YC, is doing just that.
Consecutive rounds: Consecutive funding by non-AI startups has all but disappeared since the boom of 2021. But can Coast, which calls itself a “financial services platform for the future of transportation,” bring back the trend? The company just raised a $40 million Series B from ICONIQ Growth just four months after announcing a $25 million venture round.
AI Talent: After six years of operating as a bootstrapped business, Tribe AI raised $3.2 million to help companies hire contractors who can execute their AI strategies.
This week's most interesting VC and fund news
While there wasn't much new fund news this week, VCs definitely remained in the spotlight.
A16z co-founders and Trump supporters Marc Andreessen and Ben Horowitz recorded a nearly two-hour podcast explaining their reasons for switching parties. They acknowledged that they are single-issue voters, and that their issues relate to the interests of startups (and potentially their pocketbooks). In essence, they say, the Biden administration is trying to over-regulate AI, has not provided clarity on cryptocurrency, and has proposed an unrealized capital gains tax that they cannot accept. They believe Trump is better for startups.
VC at the RNC: David Sacks, founder of Craft Ventures and co-host of the All-In podcast, spoke at the Republican National Convention. Sacks may be a familiar face in Silicon Valley, but his name recognition among average Republicans remains low, writes TechCrunch reporter Margaux MacColl, who was at the RNC. “Applause was tepid throughout his speech.”
Menlo and Anthropic Fund: Menlo Ventures was one of the largest investors in Anthropic's Series D. This week, the VC firm partnered with LLM Maker to launch a $100 million fund to back pre-seed, seed and Series A AI startups.
Last but not least
AI funding is exploding, but did you know that the number of AI companies that have raised $100 million or more in funding rounds this year has already reached 28? This list is expected to grow in the coming months.