This is a transcript of the latest episode of Equity, TechCrunch's podcast focused on venture capital. New episodes of Equity air every Monday, Wednesday and Friday.
Listen above or read below to catch up on our Wednesday show, where we break down the week's top startup and venture capital news.
Transcription
0:10
Hello and welcome back to Equity, TechCrunch's podcast where we break down the numbers and nuances behind the headlines. Today is February 14, 2024. Happy Valentine's Day, I hope you eat some chocolate and relax on the couch because you deserve it.
This is our Wednesday show, where we delve into the critical startup and venture capital stories from the week so far. Today in the pod we have an absolutely spectacular list of things. I can't wait to talk about it.
We'll start with Sierra, Bret Taylor's new startup, and why FlowFi wants to combine people and technology. Then we have venture capital rounds from Fold and Antithesis. And we'll close our kickoff coverage by asking why everyone wants you to eat more mushrooms. In the venture corner we have news about Homebrew, Foundry and the latest from Europe. Come on!
1:00
To kick off our startup coverage, today I want to talk about someone who is perhaps best known for his work in big tech. That's Bret Taylor. He is the former Friend of Google Maps, founded Friendfeed and later became the CTO of Facebook. He later founded Quip and later became co-CEO of Salesforce. And he is a former Twitter board member and currently sits on the OpenAI board of directors. And he's building a new company called Sierra.
So what is Sierra doing? Well she's building conversational ai agents, essentially bits of artificial intelligence that do things for end users, like ask questions or update their account. The ai agent space is busy, but Sierra has already raised $110 million and brought a product to market. So it looks like with plenty of capital, early customers, and probably even some initial revenue, it's making a well-backed play to dominate a growing software niche.
But it's getting the job done in a more practical way than I expected. Is ai-startup-sierra-110-million-funding-sequoia-benchmark/”>creating software tools for your clientsrather than just offering them a big bag of stuff to put together themselves.
The joke here is that if you want to raise money today, start an ai startup. But if you In fact I want to raise money today, well, build an ai startup that also sits on the board of OpenAI. Fortune reports that Sierra is using closed (also known as OpenAI) and open-source ai models that it chains together to prevent hallucinations and help its ai agents execute tasks for its clients. Chained LLMs could become a trend.
2:36
Continuing with FlowFi, I think this is an absolutely fascinating startup. It's just raised $9 million from Blumberg Capital. But the way he goes after his market, the financial management of startups, really has me sitting up.
That's why there's a big push today to use ai to do as many things as humans can do, as often and as quickly as possible. The logic here is quite simple. Computer agents are much cheaper than human workers. Trading the latter for the former makes sense from a business perspective. However, FlowFi is creating a startup finance software package that combines with a marketplace of real humans helping their clients with their books. So it's about creating more human software rather than more ai software.
And, frankly, in this case I understand it. You don't want your CFO to be a robot. He wants someone who is grizzled, experienced, and can give him that familiar CFO look when he makes a silly mistake or spends too much money on business trip dinners. That's why the company offers accounting help, a CFO-like service, and tax preparation assistance, only with software. and humans in charge. Very cool. But let's see how it scales.
3:47
And there was a lot more this week. I've had to condense a couple of things, but I want to reach more companies. So let's start with Bold, just raised $50 million, and is working on payments in Latin America. So this is a big FinTech round in a region that was once absolutely crazy for FinTech and given the pullback of companies we've seen in Latin America, and in FinTech in general, it's great to see Bold raise money for this project, located where it is. The boldness is a welcome ray of light for many other Latin American fintechs hoping to raise more capital for themselves. And if you remember, in last Friday's program we talked a lot about what Latin American startups are like. more efficient according to several key metrics than those of other regions. So maybe the venture capitalists here are seeing this and putting their checkbook to work where it could have the biggest impact.
4:35
Next up is a company called Antithesis, just raised $47 million for its automated software testing service. I chose this one because I think it's cool. The reason is that everyone agrees that software is the future of the world. But actually creating written code that is secure and stable is not an easy task. You can compare this to writing and editing: you need both to have a good final product. So Antithesis is creating a bunch of tools to help the code run really well, if I can put it that way. It clearly has a lot of competition, especially in the startup world. But I don't think you'll get as much capital in today's market if your numbers aren't top-notch. Antithesis, one to watch.
5:20
And then, to close out our home coverage, why does everyone want you to eat mushrooms? It's actually getting a little weird. This time, it is a startup called Spacegoods – Quite a word. It's a London-based wellness brand that wants to use mushrooms and nootropics to create a line of powder blends. TechCrunch says it claims its product will improve my energy, relaxation, and mood. To which I can only say that for sure. Other startups are using mushrooms to make fake leather, protein-concentrated foods and energy drinks. Apparently mushrooms can do everything. And that means the people who wrote the spread were right: I guess we should all keep an eye out for bottles of mushroom whiskey, which should be on the way.
6:04
Moving from startups to venture capital, our first venture capital story of the morning is that Homebrew targets $50 million for new fund. Venture capital company Homebrew. You've probably heard of it. He is raising $50 million for a new fund, according to an SEC filing. And this presentation is actually a bit surprising because Homebrew said almost two years ago that it was looking for an evergreen, more stage-agnostic model that would be funded solely by its partners Satya Patel and Hunter Walk. So what to do with the news? I have a couple of ideas. Perhaps it could be an opportunity fund, or perhaps a highly tailored vehicle for larger follow-on investments in previous deals.
If Homebrew can be self-funded, its previous funding has worked very well. So people may want to co-invest with it a bit, even if their primary funds will now be raised internally. Anyway, can you imagine the LP meetings of a fund that is entirely backed by its own general partners? It would be like “Hello and good morning. How did we do so well this quarter? Okay, the meeting is adjourned.”
7:13
But if Homebrew is reloading, Foundry Group will leave. Foundry is an 18-year-old venture capital firm with nearly $3.5 billion in assets under management. And has quietly decided to close and not raise more funds. This move caught TechCrunch by surprise because the company announced a $500 million fund last year.
Over the years, Foundry has invested in more than 200 companies and 50 venture capital firms. And that's according to its co-founder and partner Seth Levine. In terms of names you know, Foundry has backed companies like Fitbit and Zynga. But in a post, Levine wrote that, and I quote: “While venture capital firms rarely make decisions like this, that's precisely what we planned to do when we started the foundry in 2006. Since our founding, we intentionally decided not to build a legacy or a generational legacy.” firm.”
In some ways, this feels somewhat refreshing. Do something for a while, make a lot of money, and then move on. It seems eerily clean, especially from what we've seen from other venture capital firms. An important generational change or transfer can be complicated. But don't worry, Foundry still has money to invest from its latest fund, but it's not raising another one.
8:30
And to close us out, Anna Heim reports that Earlybird Health, based in Germany, has put together the definitive closure of its second fund, which will be worth 173 million euros or about 185 million US dollars. This is actually more than double the size of the first healthcare-focused fund of early adopters, which had a very creative healthcare name and was worth around €85 million at its final point. closure. So while both funds are similar in both thesis and stage, the newer, larger fund will allow Earlybird to write larger checks. Who doesn't love a little more ownership? And as Earlybird intends to invest primarily in Europe, including the UK, its new fund could be good news for healthtech startups in the region, many of which are running out of cash following the crisis. very public fall of telehealth company Babylon.
9:23
And that is our show for this delicious Wednesday morning. Hugs for you. We hope you are well.
We'll have more for you on Friday, but in the meantime, we're “equitypod” on X and Threads and we're TechCrunchpods on Tiktok.
In the meantime, I strongly recommend that you check out our two sister programs. That is Chain reaction in the crypto rhythm and Found talking to the founders about how they built what they did. Alright. This is Alex, I'll talk to you soon. Bye bye.
Equity is hosted by myself, Alex Wilhelm, and TechCrunch senior reporter Mary Ann Azevedo. We are produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our illustrator and many thanks to the audience development team and Henry Pickavet who manages TechCrunch audio products. Thank you very much for listening and we will talk to you next time.
