Unmasking Startups 'Mass Extinction Event'

And a revolutionary AI-Content Deal

Author

Lucila Sarquis
December 14, 2023

This year has shown a decline in VC funding, with $104.5 billion raised in the first nine months of the year, in contrast to the $183.9 billion raised in the same period in 2022. Meanwhile, over $27 billion in venture funding were raised by startups that failed this year 📉💥

Meanwhile, an important partnership might change the rules for AI and media companies (Hint: content creators might have a new reason to toast) and the SaaS European industry shows serious resilience. What else? Find out 😏

Surviving the Startup Extinction: A Call for Capital Efficiency and Profitability

This year over $27 billion in venture funding was raised by 3,200 startups that eventually failed. The list of fallen soldiers includes some big names and the figure is said to likely underrepresent the true scale of the cash burn, excluding major losses from public companies or those acquired.

This surge in startup failures, referred to as a ‘mass extinction event’ ☄️🦖 is partly attributed to a considerable decline in VC funding. Compared to 2022, the first nine months of 2023 saw a drop of $79.4 billion in funding. This raises questions around the sustainability of the startup ecosystem and highlights the need for companies to focus more on capital efficiency and profitability.

While these figures may seem daunting, it's essential to remember that failure is part of the entrepreneurial journey. Founders should focus on building sustainable business models and balancing innovation with financial stability. For more in-depth insights, check out this article.

Startup Events and Deadlines

  1. Financial Modeling 101 - Free Webinar | January 18, 2024 | Online

  2. Financial Modeling Course for Startup Founders | January 22, 2024 | Online

  3. Pitch Deck Design | February 13, 2024 | Online

  4. TechCrunch Early Stage | April 25, 2024 | Online

Discover the many benefits of global hiring

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Which famous entrepreneur coined the term 'Software as a Service' (SaaS)?

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These companies just raised money

  1. 🚀 Space tech startup True Anomaly lands a cool $100M to scale up its space security tech, advancing its autonomous spacecraft, Jackal.

  2. 🤑 Indian digital lending platform Aye Finance secures $37.18M in Series F funding, plans a 2026 IPO after boosting revenue by 45% to $77.1M.

  3. 📁 Despite a downturn in European startup investments, French procurement software Pivot snags $21.6M in a Series A round, just months after its creation

  4. 🤖 Robotic exosuit startup, Verve Motion, nets $20M in Series B round to boost manufacturing and market expansion

  5. ♻️ Berlin-based climate tech startup, NeoCarbon, raises €3.2M seed funding to speed up rollout of carbon removal units

  6. 🌳 Ecobase, an Estonian reforestation startup, has raised €2.5 million in a seed funding round.

Breaking Ground: OpenAI and Axel Springer Redefine the AI-Media Partnership

OpenAI has made a groundbreaking deal with German media giant Axel Springer, where OpenAI will license Axel Springer's news content. This marks a significant shift in digital copyright challenges, as it's one of the first instances of an AI company paying for content usage.

Content will be used to train OpenAI's AI models and for its chatbot, ChatGPT. This approach addresses concerns about AI companies using intellectual property without compensation.

Mathias Döpfner, CEO of Axel Springer, sees this as an evolution in journalism, exploring AI-empowered opportunities to enhance quality and societal relevance.

The partnership could set a precedent for how AI companies use content and how content creators protect and monetize their work. Content licensing may become a significant aspect in the AI-dominated landscape.

Six bullets of updates

  1. Despite a dip in funding, European SaaS companies show resilience with increased operational efficiency and steady M&A activity 💪🏽

  2. Gen Z's search for digital authenticity fuels growth for Lapse, a social app mimicking disposable cameras, hitting 6.5M active users in Nov '23 🤳🏻

  3. EIC launches €1.2B fund for deep tech startups in 2024, earmarking €420M for strategic industries 🤖

  4. Open-source is the future of generative AI, says Linux Foundation, launching the Generative AI Commons & revealing 50% of organizations are already using these tools 🔓

  5. Cohere, an OpenAI competitor, introduces "build-your-own connectors," enabling secure data integration from apps like Slack and Google Drive to enhance AI assistants 👷

  6. COP28's climate change effectiveness questioned, with confessions of lagging indicators and fossil fuel expansion 🌱

SparkCharge raised $7M with Slidebean’s help

"The pitch deck is crucial; it's the first thing that an investor asks for," Joshua Aviv, the CEO and Founder of SparkCharge explained. "By going with Slidebean, we were able to captivate and create a very cinematic and visually appealing pitch deck for investors."

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