March 2, 2024
Investment in India is in free fall | TechCrunch


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You shouldn’t compare apples to oranges, but similarly, comparing iPhones to Androids is a fool’s errand as well.

Now that Apple is finally phasing out the Lightning connector after 11 years in favor of the more universal standard USB-C (across a ton of products), the conversation has reignited about silos versus open standards. Apple has long attracted the ire of Android users who are locked out of the iMessage standard, and every now and again a workaround comes and goes. Most recently, an app called Beeper enabled Android users to send iMessages to iPhone users. To the surprise of exactly nobody, Apple quickly locked that down, drawing side-eye from all angles, not least the Senate.

Of course, neither Apple nor Android are startups, so what is this doing as a headline in Startups Weekly? Well, I think it serves as a really good reminder that products like Beeper can explode onto the scene, before being scrubbed from existence again just as fast.

Whether you are building on Apple’s ecosystem or on ChatGPT, or whether your company relies heavily on another service altogether, it’s worth not fully locking your success to the whims of a company you have little or no control over.

With that little soapbox speech out of the way . . . let’s see what else happened in the world of startups as we hit the halfway mark of December.

Rocky oceans in the startup ecosystems

sunlight as seen from beneath the ocean surface

Image Credits: Diane Keough (opens in a new window) / Getty Images

In an epic plot twist, Omidyar Network, the philanthropic investment firm founded by eBay’s Pierre Omidyar, is waving goodbye to India after 13 years. Despite recent investments and public engagements, they’re pulling the plug, citing a “significant change in context” and the rise of local philanthropy and venture capital. While they boast about catalyzing impact, their abrupt exit following a rough year (think fire sales of backed startups) has left many in the Indian startup scene scratching their heads.

Analysts are worrying this is part of a broader trend: Manish reported that Indian startups have raised about $7 billion this year, down from about $25 billion in 2022 and $37 billion in 2021. Woof.

More venture and fundraising news:

Shark fintech soup: SumUp, the fintech darling catering to small businesses, is throwing €285 million into its survival kit to brave the fintech tempest. While it’s planting flags in new markets and adding shiny features to its payment arsenal, the funding landscape looks as inviting as a shark tank. Despite boasting a sunnier EBITDA outlook, their customer tally hasn’t budged in two years. Fintech’s a tough gig, folks.

OpenAI invests in India: In a bold move, OpenAI is cozying up to India’s AI scene by enlisting Rishi Jaitly, Twitter India’s ex-chief, to be their local eyes on the ground. They’re reportedly moving toward a team setup in India but don’t have an official presence yet — just a freshly minted trademark. Jaitly is helping OpenAI navigate India’s complex policy landscape.

Here’s some rocket fuel: In the latest “slow and steady doesn’t win the race” move, Paris-based startup studio Hexa, fresh from a $22 million fundraising spree, introduces Hexa Scale. This program targets B2B companies stuck in the doldrums of linear growth, offering them a lifeline back to the sexier world of exponential growth.

The motion of the AI

Robots work on a contract and review a legal book to illustrate AI usage in law.

Image Credits: mathisworks / Getty Images

Meet Sarvam AI, the Indian startup that’s just a baby at five months old but is already flexing its financial muscles with a whopping $41 million in funding. Who said startups need to crawl before they walk? Sarvam AI, with its eyes on building full-stack generative AI offerings, is skipping the baby steps and leaping straight into the AI playground. They’re not just playing with language models; they’re reimagining them with a focus on Indian languages and voice interfaces. It’s like watching a superhero origin story, but for AI startups.

If a $41 million round to Sarvam didn’t sufficiently remind you that AI continues to be smolderingly hot, consider Mistral AI, a Parisian startup, just said “au revoir” to mediocrity by closing a whopping $415 million funding round. The company is busy shaping the future of AI with a distinctly European flair. Romain digs into why Silicon Valley might need to watch its back. Bonne lecture!

Lots of AI news coming out of Google over the past week or so. The search giant launched Gemini, which is powering a lot of its AI efforts. It released AI Studio, designed to build applications on Gemini easily, but criticism quickly surfaced. For one thing, it wasn’t the generative AI Hail Mary that Google needed (and the rest of us desired), and the early impressions of the platform were a bit meh. Google also announced AlphaCode 2, based on the tech, along with a huge update to the chatbot platform Bard.

Perhaps the biggest news was that Google’s Pixel 8 Pro, powered by the brainiac AI model Gemini, is making other phones look like they’re still playing Snake. This genius phone features an AI summarizer in its Recorder app and a Smart Reply in Gboard for those who can’t be bothered to text back. Plus, it even works on-device (i.e., without Wi-Fi or a signal, you still have an AI at your fingertips), so now you can be AI-enhanced in the middle of nowhere.

Moar AI goodness:

X gettin’ sassy with AI: Now rolling out to subscribers, Grok promises to add a dash of unpredictability to your daily digital interactions. So, if you’re tired of the same old AI small talk and crave something with a bit more sass and spunk, Grok is your go-to. It’s currently being rolled out to all premium subscribers, followed by all English-language users, then Japanese-language users.

Say hello to my little friend: Relevance AI is swooping in with its low-code platform, promising to be the fairy godmother for businesses of all sizes. They’re dishing out custom AI agents faster than you can say “automation,” and with a cool $13.2 million in the bank.

The EU flexes its AI muscles: After marathon “final” talks that stretched to almost three days, European Union lawmakers clinched a political deal on a risk-based framework for regulating artificial intelligence.

Calm before the storm?

Numbers indicate that early-stage startups are throwing a party with better valuations and more cash flow, defying the gloomy 2023 narratives, Alex and Anna write on TC+. Meanwhile, their older siblings, the scale-ups and unicorns, are taking swimming lessons as they find themselves in deeper waters. Carta’s data suggests the startup world isn’t uniformly bleak; it’s just picky, favoring the young and sprightly. This raises a toast to the idea of sprinting toward an IPO, rather than marinating in private equity. Who knew age could be more than just a number in the startup game?

Fintechs still dominated November’s new billion-dollar babies. Stripe, Brex, and others got haircuts in valuations, but don’t despair, there’s hope: New unicorns like Tabby and Enable are emerging. Also, Simply Homes is making waves by tackling affordable housing. Christine and Mary Ann wink at 2024, predicting more fintech unicorns, because who doesn’t love a good comeback story?

Also in startup land:

Operations are table stakes: Josh Claman, CEO of Accelsius, writes a TC+ piece reminding us that while tech advancements are dazzling, it’s the operational side — efficiently managing the nuts and bolts — that truly gives companies an edge.

Fundraising season is coming: Yeah, it’s pretty dead right now, but come January, the VCs are coming back from their extended December breaks and will be ready to dispense cash again. Are you ready?

Turning their backs on Texas?: Once hailed as the tech world’s darling, it seems Austin might be losing a bit of its sparkle. Techstars is hitting the pause button on its Austin chapter, signaling a potential shift in the city’s tech allure. Reasons? Well, Austin’s not as cheap as it once seemed, especially with housing prices acting like they’re on a caffeine high.

Top reads on TechCrunch this week

You’ve got the highlights above, but as I’m looking at our most read stories, it turns out I missed a couple. Here’s the best of the rest:

RIP, podcasting: It seems like the writing is on the soundproofed wall: The podcast boom is over, and this week’s news is evidence. Spotify laid off 17% of the company — its third round of layoffs this year — and canceled two highly acclaimed shows, including a winner of the Pulitzer Prize for audio reporting.

Pedal to the metal: Lucid’s chief financial officer Sherry House is leaving the company to “pursue other opportunities,” the automaker told investors on Monday.

It’s all fun and games until everyone gets fired: Hasbro is laying off 1,100 employees, after it already laid off 800 employees in January. While some employees will find out about the fate of their jobs on Tuesday, others will be cut in the coming year. By 2025, Hasbro told shareholders, the company hopes to save about $350 million to $400 million in costs.



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