Regulatory Road

Welcome to Last Week’s News - the lazy way to find out what's happening in tech & venture, with enough analysis thrown in to sound smart at dinner parties.

Max Cutler wrote today's edition.

Last Week’s News is brought to you by Odin - the seamless way to raise and deploy capital in private companies, used by over 700 PE firms, VCs, angel syndicates and founders globally, and trusted by over 5,000 investors.

Headlines

Look ma, no hands (but more rules)

Is the UK finally flexing their post-Brexit autonomy??

Great Britain, self-described “world leader” in the regulation of self-driving vehicles (lol), saw its long-cooking Automated Vehicles Act become law on Monday.?

The Brits’ framing for why this legislation was a priority (it was included in the 2023 King’s Speech) is actually encouraging. They insist that establishing clear rules and expectations for players in the AV space will help to speed up rollout.?

The classic tech meme is that the USA innovates and Europe regulates - acting more as a decelerant than anything else.

This situation looks a little different. Firstly, the timing is excellent. We mentioned in Last Week's News #2 earlier this month that Wayve raised a Series C of over $1B to develop the eyes and brains of AVs. Second, at least as advertised, this effort is very much an attempt at constructive regulation.?

There has been honesty about existing legal frameworks. Current rules focus on limiting what immature companies can do as they try things out. The Automated Vehicles Act, on the other hand, concerns itself with establishing “new vocabulary, new legal actors, and regulatory schemes”, so that the UK can meet its target of having streets full of AVs by 2026.?

Liability for accidents is in the center of the legislative crosshairs. The new law is clear that corporations (not passengers) will be responsible when things go wrong.

From this article in TechCrunch:?

“Each approved self-driving vehicle will have a corresponding “authorized self-driving entity,” which will typically be the manufacturer but could also be the software developer or insurance company. And this entity will be responsible for the vehicle when self-driving mode is activated.”??

There will be an independent board that approves vehicles, investigates incidents, and communicates about ‘ongoing obligations’ to manufacturers and tech companies alike.?

There is a lot to be optimistic about. The UK is having a proper go here at establishing a global standard for companies working on AVs, guiding them towards building solutions and tools that are both useful and compliant. Down the line, this could really be a big boon for the country.?

Consider how Delaware is a center for corporate law and administration in the US. Could the UK become the Delaware of the autonomous vehicle world? A hub where firms base themselves so they can roll out and test new features in an environment with clear rules. There is potentially thousands of jobs and billions in GDP on the table here.

It is positive to see Britain taking a confident step towards building a post-Brexit identity beyond the dyspraxic charade that has been the Conservative party for the last 14 years.

Things can only get better, I suppose...

The British are coming (to regulate AI companies in SF)! The British are coming (to regulate AI companies in SF)!nbsp;

We stay with Britain for the next bit of news. The UK’s AI Safety Institute (ASI) announced that they will put boots on the ground in SF. Why? Because they want to be as close as possible to the epicenter of AI, of course.

The U.K. secretary of state for science, innovation and technology Michelle Donalan said as much in an interview:

“By having people on the ground in San Francisco, it will give them access to the headquarters of many of these AI companies. A number of them have bases here in the United Kingdom, but we think that it would be very useful to have a base there as well, and access to an additional pool of talent, and be able to work even more collaboratively and hand-in-glove with the United States.”

Not so fast!” I hear you say. “I’m feeling strong ‘you innovate we regulate’” energy.

I’m not so sure. To their credit, the rulemakers seem to want to (literally) meet the creators where they are.?

Donelan again:?

“Our evaluation process is an emerging science in itself. So with every evaluation, we will develop the process and finesse it even more.”

Similar to the UK government’s approach to AVs, this conciliatory, dare I say liberal, approach should be cheered. There is a genuine openness to learning and collaborating being shown here. It goes pretty much without saying that there should be oversight in AI. But for too long, especially on the European side, the focus has largely been on ticking boxes and meeting local goals and objectives.

If quotes from Donelan and Ian Hogarth, a long-time industry vet and leader of the AI Safety Institute, are taken at face value, this regulatory effort will be about learning at the coal face in order to attract global AI companies to the UK by establishing clear frameworks for the rollout of products.

Hopefully this is a break with the narrative. The tech industry has been repeatedly irritated by what it sees as an overly punitive and reactive regulatory regime in Europe - one that largely fails to understand or guide, and instead issues unfavorable judgements after the fact. In other words: value capture instead of value add.?

None of this really matters though

It is going to require far more than clear regulation to drive growth through innovation in the UK.

Tom Blomfield, cofounder of Monzo and GoCardless, on the British appetite for entrepreneurial risk:

“I just spent a week talking with some exceptional students from three of the UK’s top universities; Cambridge, Oxford and Imperial College. Along with UCL, these British universities represent 4 of the top 10 universities in the world. The US - a country with 5x more people and 8x higher GDP - has the same number of universities in the global top 10.

Why are undergrads at top American colleges 5x more likely to start companies than their UK peers? Why do Britain’s best prefer to take “safe”, prestigious jobs?

Culture and mindset. Nothing new there. People have been saying this for many years. There is an appetite for risk and acceptance of failure in the States that simply does not exist in Europe. Plus, like it or not, capitalism is the state religion of the US of A. Becoming rich mostly has a positive connotation; in Europe, it is often perceived as taking more from society than you are giving. Several decades of low growth and rising house prices will do that to you.

Tom’s career is, in many ways, a study of successfully swimming against the tide: Oxford Law degree, “threw away” a job at McKinsey to? found not one but two billion dollar companies.?

He does acknowledge that the UK ecosystem has come a long way, especially in the last decade or so. The money is certainly now there, and no longer an excuse for founders. Young people need to intentionally choose to start companies, eschewing more predictable paths.?

Tom closes by saying this is the best time yet to build a company.

I couldn’t agree more.

Other bits

• Scarlett Johansson is pursuing legal action against Open AI because one of the voice avatars from GPT-4.5o sounds like her (really her character in Her)?
• The Safety Team at Open AI has been dissolved and will now have its members distributed across the company, likely being listened to less than before?
• OnlyFans is outsourcing text-chat to boiler rooms in developing countries. Reminds me of that Naval tweet:

• Humane, the maker of the AI wearable computer that most people hated, is trying to sell itself for around $1 billion
• xAI party Round - Elon secures $6B in fresh capital from Andreessen, Lightspeed, Sequoia and Tribe to take on OpenAI, Anthropic and co.
• Nvidia revenue continues to soar, up 262% YoY

• Maelle Gavet has stepped down as CEO of Techstars. There has been a lot of customer and exec churn at Techstars over the last few years as the accelerator has struggled to reinvent itself.

Fundraising

Dry Powder

The Americas - little action on the fundraising side, in relative terms

• Contour Venture Partners, an early investor in Datadog and Movable Ink, has raised $42 million for its fifth fund on a target of $90 million
• Valar Ventures (yet another Lord of the Rings themed company from Peter Thiel) raised a $300m fund IX, less than half of what it raised in 2021 for vund VIII. Thiel is not actively involved in the firm.

EMEA - another fund focused on sustainability, plus another solo GP

• ETF Partners, a London based VC, raised $310 million for its fourth fund focused on companies with a positive environmental impact.
• OpenseedVC (London) which backs operators in Africa and Europe starting their companies, reached first close on a $10M fund

Big startup rounds

• ???? Scale AI raised a $1 billion Series F to further develop their “data foundry” for AI. Existing investor Accel led the round with participation from YC, Founders Fund, and Thrive Capital, among others
• ???? Vercel, a cloud platform for website development out of SF raised $250 million a Series E. Accel led the round and was joined by existing investors CRV, GV, Notable Capital, Bedrock, and others.?
• ???? Sigma, a San Francisco-based developer of business intelligence and data analytics tools, raised $200 million in Series D funding. Spark Capital and Avenir Growth Capital co-led the round and was joined by NewView Capital and existing investors Snowflake Ventures, Sutter Hill Ventures, D1 Ventures, Xn Ventures, and Altimeter Capital.
• ???? Yendo, a Dallas-based fintech selling vehicle secured credit cards, has raised $150 million in debt financing, led by i80 Group, along with $15 million in equity,
• ???? KKR led the $93 million Series C of Vitesse, a London-based provider of treasury and payment solutions for insurance companies
• Dan Romero’s Farcaster, a blockchain-based social protocol, raised $150 million from Paradigm, a16z Crypto, USV, and others

Best of the Internet

Chat XiPT

Beijing has launched a chatbot trained on the thoughts of President Xi Jinping. The Odin team had plenty to say on this one in Slack

Garbage in garbage out

We’ve all been there

Do yourself a favour and get some exercise this weekend

Thank you for reading! If you enjoyed this hit the like, and if you didn’t please do drop us some feedback!

Written from J.M. Reidy’s in Killarney, Ireland,

MC?

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