Startup Monday: Latest tech trends & news happening in the global startup ecosystem (Issue 127- April 13)

Welcome to Startup Monday, my weekly newsletter that recaps the week in the global startup ecosystem. To have this newsletter emailed to you, you can sign up here.

-Narine-

Top startup news to follow this week:

1. NFX launching ultra-fast $20 million investment track to support Israeli AI and biotech startups

Companies will receive a response within nine days of submission, with funds transferred within three weeks, utilizing a SAFE agreement to minimize bureaucracy

Venture capital fund NFX, considered one of the largest Seed funds globally, is launching an ultra-fast emergency investment track called Fast to support early-stage Israeli startups, primarily in artificial intelligence and biotech.

During the Covid-19 pandemic, the fund took similar action, allocating tens of millions of dollars for investments in companies in Silicon Valley and Israel. Now, the fast track will focus only on Seed and pre-Seed investments in Israeli companies, totaling $20 million. Companies in the track will receive a response within nine days of submission, with funds transferred within three weeks, utilizing a SAFE agreement to minimize bureaucracy significantly, according to the fund.

2. Singapore-based blockchain startup aelf joins AI race with $50m fund

Blockchain startup aelf has unveiled a new $50 million ecosystem fund aimed at prioritizing the integration of artificial intelligence into the blockchain.

Singapore-headquartered blockchain ecosystem aelf is launching a new multi-million dollar initiative to transition from a decentralised network to a “vibrant ecosystem enriched with state-of-the-art AI models.”

Although the funding criteria haven’t been revealed, the announcement suggests that current projects and games on the aelf blockchain are preparing to incorporate AI capabilities, reflecting a growing interest in the synergy of blockchain and AI among companies.

As crypto.news previously reported , Aptos Labs, the firm behind the Aptos blockchain, and io.net entered into a partnership to improve access to scalable GPU resources, aiming to enhance AI and machine learning capabilities. As part of the deal, io.net and Aptos Labs will collaborate on creating a range of AI models and products for their eventual release on the Aptos blockchain network.

3. AI data security startup Cyera confirms $300M raise at a $1.4B valuation

Artificial intelligence continues to be a big threat, but it’s also a huge promise in the world of cybersecurity. Today, one of the startups tackling both the opportunity and the challenge is announcing a major round of funding. Cyera has built an AI-based platform to help organizations understand the location and movement of all the data in their networks — critical for taking the right steps to secure that data, whether to defend against cyberattacks or to keep it from inadvertently leaking into a large language model.

The company has raised $300 million in a Series C round that values it at $1.4 billion, TechCrunch has learned.

Growth rounds continue to be a major challenge for tech startups, so Cyera’s fundraise is notable not just for its size, but also because it nearly triples the company’s valuation in less than a year — it last raised a $100 million Series B in June 2023 . This speaks to the company’s traction — it didn’t disclose numbers, but its customers include a number of giant multinationals — as well as its outlook on the market and how it’s addressing that.

TechCrunch and other outlets reported on this fundraise when it was still in the works, and today’s news confirms several of the details we uncovered , including the size of the round and the lead investor, Coatue, which is new to the startup’s cap table. Other new investors include Spark Capital, Georgian, and strategic backer AT&T Ventures.

AT&T is a noteworthy name here. In March , TechCrunch revealed that the multinational carrier had to initiate a mass reset of accounts after the details of 7.6 million current account holders, and more than 65 million former account holders, were dumped online due to a data breach that happened in 2019. Incidents like that are typical of what drives companies to sign up to companies like Cyera, sometimes ahead of any crisis, sometimes in order to prevent another crisis.

“You have no idea how many times a month I get a phone call from a CISO asking delicately for some time,” said Cyera CEO Yotam Segev in an interview. “‘I’ve got something going on,’ they say. ‘I need you. How fast can you guys scan my environment?’ It happens every time. And what we do is, we jump on it. We send a squad, we have them figure out what data was in scope. They sometimes don’t even know what data was breached.” (AT&T’s breach, it should be noted, took place before Cyera was founded.)

In a nutshell, Cyera has built a platform that takes a full assessment of an organization’s data, where it was created, and where it’s stored and where it’s being used.

4. Investors in talks to help Elon Musk's xAI raise $3 billion, WSJ reports

April 5 (Reuters) - Investors close to Elon Musk are in talks to help his artificial-intelligence startup xAI raise $3 billion in a round that would value the company at $18 billion, the Wall Street Journal reported on Friday.

Venture capital firm Gigafund, and Steve Jurvetson are among the backers considering investing in the round, the report said, citing people familiar with the matter.

The WSJ report also said that a co-founder of another venture firm is also among the backers. However, it did not name the person or the firm.

Terms of the xAI fundraising were not finalized and the plans could change, the Journal said, adding that current fundraising talks have gathered momentum recently.

xAI could not be immediately reached for comment. Musk's office did not respond to a Reuters request for comment.

Seeking an alternative to Microsoft (MSFT.O), opens new tab -backed OpenAI and Alphabet's (GOOGL.O), opens new tab Google, Musk launched xAI last year.

Earlier this year, Musk said xAI was not in talks with investors to secure funding, following a media report about the startup raising up to $6 billion.

5. How PayJoy built a $300M business by letting the underserved use their smartphones as collateral for loans

Lerato Motloung is a mother of two who works in a supermarket in Johannesburg, South Africa. After her phone was stolen, Motloung had to go without a mobile phone for nine months because she could not afford a new one. Then, in February 2024, she saw a sign about PayJoy , a startup that offers lending to the underserved in emerging markets. She was soon able to buy her first smartphone.

Motloung is one of millions of customers that San Francisco–based PayJoy has helped since its 2015 inception. (She was its 10 millionth customer.) The company’s mission is to “provide a fair and responsible entry point for individuals in emerging markets to enter the modern financial system, build credit, achieve economic freedom, and access digital connectivity.”

PayJoy became a public benefit corporation last year and is an example of a company attempting to do good while also generating meaningful revenue and running a profitable business. And, unlike other startups offering loans to the underserved, it’s doing so in a way that’s not predatory, it says.

“We meet customers where they are — even with no bank account or formal credit history, we create access to financial services and carve a path into the financial system,” said co-founder and CEO Doug Ricket.

PayJoy is applying a buy now, pay-as-you-go model to the estimated 3 billion adults globally who don’t have credit by allowing them to purchase smartphones and pay weekly for a 3- to 12-month period. The phones themselves are used as collateral for the loan.

While the loans are interest free, with no late or hidden fees, the company does mark up the price it charges for the phones by a “multiple,” Ricket said. But it shares the full price upfront before customers sign a contract.

“Users will never pay more than the disclosed amount and can return their phone and walk away debt-free at any time,” he says.

6. Guesty snaps up $130M at $900M valuation to help property managers list on Airbnb and beyond

Travel and tourism are very much back on the map for consumers and the business world. Now, to underscore that surge, one of the startups building software in the space has closed a big round of funding. Guesty , a platform that lets accommodation managers manage their business online, including on platforms like Airbnb and Vrbo, has raised $130 million.

Sources confirmed to TechCrunch that the Series F values Guesty at around $900 million post-money.

The company, based out of New York with roots in Israel, says its revenue has increased 5x in the last three years, and it expects to turn profitable this year. The company did not specify actual revenue figures.

KKR is leading this round, with Apax Funds, Inovia, BDT & MSD Partners and Sixth Street also participating.

To put the funding into some context: Post-COVID, the global travel and tourism sector has been on a strong rebound, and is expected to generate record-high sales of $11.1 trillion in 2024, according to the World Tourism and Travel Council . That would be despite tourism in the U.S. and China still catching up to pre-pandemic levels.

For Guesty and its competitors, this upswing has played out in the form of a number of nine-figure funding rounds. Guesty last raised a Series E of $170 million that valued it at $690 million in August 2022. Guesty’s close competitor, Hostaway, raised $175 million last May, marking its first big funding round. Within a day of that news, GetYourGuide raised a monster $194 million at a $2 billion valuation.

Mews, which like Guesty builds SaaS but for hoteliers, raised $110 million at a $1.2 billion valuation in March. This trend is a strong reminder that investors are still willing to sign term sheets in the right circumstances.

7. Clean Energy Startup Sage Geosystems Raises $17 Million for New Geothermal Energy Storage Plant

Clean energy technology startup Sage Geosystems announced that it has raised $17 million in a Series A financing round, with proceeds aimed at fully funding a new commercial geothermal-based energy storage facility.

Founded in 2020, Houston, Texas-based Sage Geosystems is developing solutions aimed at making geothermal energy, typically limited to volcanic regions or requiring deep drilling, more widely available and affordable, and at depths that can be economically drilled using existing oilfield technologies and equipment. The company’s technologies include geothermal energy storage solutions that can integrate with renewable energy sources such as solar and wind to ensure a continuous and reliable power supply, enabling baseload renewable energy, and with benefits over current storage solutions including lower above-ground footprint, avoidance of sustainability issues relating to materials such as lithium, improved efficiency and long-duration storage capabilities.

The new financing will be used to fund EarthStore, a new 3MW commercial facility in Texas based on Sage’s Geopressured Geothermal System (GGS) technology that harvests energy from pressurized water stored deep underground, and is able to store energy for short and long duration periods, and can be paired with intermittent renewable energy sources such as wind and solar. Construction of the facility is anticipated to begin in Q2 2024, with a targeted commission date of Q4 2024.

Cindy Taff, CEO of Sage Geosystems, said:

“The first close of our Series A funding and our commercial facility are significant milestones in our mission to make Geopressured Geothermal System (GGS) technologies a reality. The success of our GGS technologies is not only critical to Sage Geosystems becoming post-revenue, but it is an essential step in accelerating the development of this proprietary geothermal baseload approach.”

The funding round was led by Chesapeake Energy Corporation, and included participation from technology investor Arch Meredith, Helium-3 Ventures, and support from existing investors Virya, LLC, Nabors Industries Ltd., and Ignis Energy Inc.

8. Amsterdam-based neobank Bunq raises €29 million to expand in the UK and the US

The European digital bank Bunq recently announced a net profit of €53 million for 2023 in its annual report. The company also informed that it got a fresh capital injection of €29 million from its existing shareholders. This is part of Bunq’s plans for growing in other markets, as well as to ensure compliance with regulatory requirements set by the Dutch Central Bank, according to Finovate .?

Bunq is renowned for its mission to revolutionize banking, placing a strong emphasis on user-friendly digital interfaces and innovative financial services.?

In 2023, Bunq, witnessed significant growth and progress, with customer assets surging from €1.8 billion to over €6.9 billion. The institution also achieved a net profit for the year, largely attributed to the substantial increase in Bunq’s interest income. Reported figures reveal that this income tripled in 2023, soaring from over €41 million to surpassing €127 million.

“As part of our international growth ambitions, we applied for an American banking license in April of 2023 and opened offices in New York City, paving the way for further international growth,” mentioned Ali Niknam, Founder and CEO of Bunq, in its annual report. “While we can’t predict the future, we can shape it. If the changes in the banking landscape of the past decade or indeed just the changes of the past year are any indication, the future is up to be a bright one,” added.

The newly acquired funds will fuel bunq’s expansion plans, particularly in the U.K. market, and mark its strategic entry into the U.S. market. To facilitate this expansion, bunq is gearing up to reapply for a banking license in the U.S. through the Office of the Comptroller of the Currency (OCC), following the withdrawal of a previous application due to regulatory challenges with Dutch and U.S. authorities.

9. ION Clean Energy Announces $45 Million Investment from Chevron New Energies and Carbon Direct Capital and Leadership Transition

BOULDER, Colo. & HOUSTON--(BUSINESS WIRE )--ION Clean Energy (ION) announces it has raised $45 million from Chevron New Energies (CNE) , a division of Chevron U.S.A. Inc., who is leading the round, and Carbon Direct Capital. ION is a Boulder-based technology company that provides post-combustion point-source capture technology through its third-generation ICE-31 liquid amine system. The capital raised will continue to fund ION’s organizational growth and commercial deployment of its ICE-31 liquid amine carbon capture technology for hard-to-abate emissions.

We continue to make progress on our goal to deliver the full value chain of carbon capture, utilization, and storage (CCUS) as a business, and we believe ION is a part of this solution. ION has consistent proof points in technology performance, recognition from the Department of Energy, partnerships with global brands, and a strong book of business that it brings to the relationship,” said Chris Powers, Vice President of CCUS & Emerging with CNE. “ION’s solvent technology, combined with Chevron’s assets and capabilities, has the potential to reach numerous emitters and support our ambitions of a lower carbon future. We believe collaborations like this are essential to our efforts to grow carbon capture on a global scale.”

“We believe ION’s novel liquid amine solution is a game-changer for point source carbon capture,” commented Jonathan Goldberg, CEO of Carbon Direct Capital. “Especially for asset owners with hard-to-abate waste streams, ION has demonstrated exceptional performance coupled with standout environmental scores. ION has already received validation from the U.S. Department of Energy, EPC partners, and project customers. This round of growth capital is a further endorsement of ION’s technology by both financial and strategic investors,” said Goldberg.

10. London-based SMB financial management platform Mimo raises €18 million to simplify B2B payments

Mimo , the platform simplifying global payments, cash flow, and financial management for SMBs and accountants, has raised €18 million of new investment. The company is launching its platform with this funding, which was led by Northzone.

Other investors participating in this round include Cocoa Ventures, Seedcamp, Upfin VC, with an asset backed facility arranged by Fost and participation from various angel investors including founders and early operators from the likes of Stripe, GoCardless, Wayflyer, and Anyfin. Mimo will deploy the new equity funding to continue to build out its B2B payments solution for SMBs and expand its headcount.

Mimo already works with 50+ SMBs and finance professionals and processes several million GBP every month via its early access offering. The company was founded in 2023 by Henrik Grim (CEO), former General Manager of Europe at Capchase and Investment Manager at Northzone, Alexander Gernandt Segerby (CPO), and Andreas Meisingseth (CTO). It has offices in London and Stockholm.?

Recent years have seen a proliferation of SaaS tools to aid SMBs’ management of their finances. This means that, for a small business, there are an overwhelming number of applications for the various elements of financial management, each completing a different, simple task such as recording invoices, making international payments, or running payroll. This unbundled system is time-consuming and challenging to manage and reconcile in bookkeeping.

Cash flow management is the primary reason for failure among 4 in 5 businesses that go under. Small businesses must use a fragmented system of financial tools to manage this, and there is still often a significant lag between billing and the money needed for costs and payroll coming into their accounts, with the average UK-based SME being owed an estimated ￡22,000 in late payments. Although there has been innovation in SaaS and e-commerce payment systems that offset some of these problems, SMBs outside these verticals still face constant cash flow struggles and administrative pains in managing money coming in and going out. SMBs account for half of Europe’s GDP, and facilitating the movement of money between these enterprises can prevent many from going under, and has the potential to unlock their growth.?

Henrik Grim, co-founder and CEO of Mimo, commented: “I’ve seen first-hand the time-consuming and fragmented processes SMBs must deal with when managing money. SMBs and financial professionals have to jump between apps and spreadsheets to pay invoices or make and chase international payments, all while trying to keep track of and manage cash flow. Mimo bundles this into a single tool so that businesses can easily manage the movement of their money and receive payments in any currency, faster. We’re delighted to be backed by our investors to help give SMBs full control of their finances.”

Founded in 2023, Mimo, which stands for ‘Money In, Money Out’, provides a suite of financial tools that bundles the features needed for SMBs to better understand and control their cash flow. Rather than relying on a disjointed network of applications including house banks, SaaS tools and FX brokers to manage finances, Mimo gives businesses, accountants and bookkeepers a single tool for easier administration and better financial decisions. Through the platform’s credit offering, risk is minimised and working capital optimised so that businesses can send and receive payments on their own terms.?