Startup Monday: Latest tech trends & news happening in the global startup ecosystem (Issue 49)

Episode 42


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Top startups news to follow this week:

1. One of the most popular applications of artificial intelligence to date has been to use it to predict things, using algorithms trained with historical data to determine a future outcome. But popularity doesn’t always mean success: Predictive AI leaves out a lot of the nuance, context and cause-and-effect reasoning that goes into an outcome; and as some have pointed out (and as we have seen), this means that sometimes the “logical” answers produced by predictive AI can prove disastrous. A startup called causaLens has developed causal inference technology — presented as a no-code tool that doesn’t require a data scientist to use to introduce more nuance, reasoning and cause-and-effect sensibility into an AI-based system — which it believes can solve this problem.

CausaLens’s aim, CEO and co-founder Darko Matovski said, is for AI “to start to understand the world as humans understand it.”

“Human bodies are complex systems, and so applying basic AI paradigms you can find any pattern you want, correlations of any sort, and you are not getting anywhere,” Darko Matovski, the CEO and founder of the startup, said in an interview. “But if you apply cause and effect techniques to understand the mechanics of how different bodies work, you can understand more of the true nature of how one part has an impact on another.”

Last week, the startup is announcing $45 million in funding after seeing some early success with its approach, growing revenues 500% since coming out of stealth a year ago. This is being described as a “first close” of the round, meaning it’s still open and potentially going to grow in size.

2. Esusu becomes unicorn with SoftBank Vision Fund 2-led $130M funding. Esusu, a fintech that targets immigrant and minority groups and provides rent reporting and data solutions for credit building, said Thursday it has raised $130 million in a Series B fundraising round.

The investment gives four-year-old Esusu a valuation of $1 billion, placing it as one of the very few black-owned unicorns in the U.S. and globally. SoftBank Vision Fund 2 led the funding round, with participation from Jones Feliciano Family Office, Lauder Zinterhofer Family Office, Schusterman Foundation, SoftBank Opportunity Fund, Related Companies and Wilshire Lane Capital.

More than 100 million Americans spend an average of $1,100 (over $1.4 trillion per year) on their largest monthly household spend: rent. But reports say 90% of these people don’t get credit for paying their rent on time.

On a sub-level, over 45 million people in the U.S. don’t have credit scores, according to a 2020 report by the Consumer Financial Protection Bureau. Most of this demography are financially marginalized due to their background and race.

Immigrants and African Americans have lower or non-existent credit scores than other populations. To a large extent, they also witness more predatory lending, putting them in a cycle of financial insecurity. So, while they need strong credit scores to build wealth, they do not have access to build credit.

Esusu co-founders and co-CEOs Nigerian-born American Abbey Wemimo and Indian American Samir Goel grew up in immigrant homes and experienced firsthand this financial exclusion. They started the company in 2018 to build the credit scores of this marginalized group and “leverage data to bridge the racial wealth gap” via rental payments.

3. Intellect, the Singapore-based mental health startup focused primarily on Asia-Pacific markets, announced today it has raised a $10 million Series A. The company’s services, including self-directed mental wellness programs in 15 languages and online therapy sessions, are available through two channels: as an employee benefit and through Intellect’s consumer app.

The round, which Intellect claims is the largest Series A ever raised by a mental health startup in Asia, was led by HOF Capital. New investors included Headline, East Ventures, MS&AD Ventures, DG Daiwa Ventures and Pioneer Fund; existing backer Insignia Ventures Partners also returned.

Co-founder and CEO Theodoric Chew told TechCrunch that Intellect differentiates from other employee wellness programs because “Intellect’s vision isn’t simply to be a self-care app or an employee benefits platform solely, but a full mental healthcare system for Asia. That drives a differentiated approach in how we build our platform which caters from the smallest of daily struggles through self-guided programs, all the way to clinical therapy for chronic issues.”

The company, a Y Combinator alum, will use the capital to increase its product, engineering and commercial teams as it continues expanding into new markets. It currently has about three million registered users, in a total of 20 countries, with a strong commercial presence in Singapore, Hong Kong and Australia, said Chew.

4. Massachusetts-based Vecna Robotics is among those firms looking to bring autonomy to pallet moving and other forklift-centric warehouse activities. As Techcrunch reportedThe firm has already raised a decent chunk of change, including a $50 million Series B back in January 2020 — just before the pandemic did its number on the U.S. That round brought its funding north of $60 million, a figure it’s more than doubled with a new Series C.

The company already used its previous round to do a fair bit of hiring, including new CEO Craig Malloy and CMO Josh Kivenko. Here’s the former on what this fresh infusing of funding will go toward:

There is huge headroom for growth in automated material handling with over 5 billion pallets in the world being moved by more than 5 million forklifts and nearly 5 million manual operators. This investment, led by such a prominent and supportive group of investors, will allow us to accelerate our roadmap and deliver solutions to the market faster in order to meet the insatiable demand for increased throughput in material handling environments like factories and warehouses.

Vecna says the money will be used for R&D on the software and hardware front, fulfilling orders and expanding operations. The company is no doubt one in a long line of robotics firms that’ve seen increased interest among investors fueled by the pandemic and a widespread inability to keep jobs filled.

5. Entertainment platform, Fever, has just raised €200 million in a round led by Goldman Sachs Asset Management’s growth investment fund. This round, which is regarded as the largest ever in the live entertainment tech category, brings Fever to unicorn status.

This big funding news also marks an exciting time for culture and live entertainment in the era of digital entertainment and the Metaverse. It seems live entertainment and cultural experiences are still at the forefront of our minds!

Other investors participating in this mega-funding include Alignment Growth, Goodwater Capital and Smash Capital. 

Founded in 2011 in Madrid by Spanish entrepreneur Pep Gomez, Fever is now co-led by fellow Spaniards Ignacio Bachiller Ströhlein, Francisco Hein and Alexandre Pérez Casares. It’s not the company’s first time breaking records with funds in the entertainment discovery market – raising $35 million in 2019. 

Fever has been on a mission to democratize access to culture and entertainment through its innovative approach to the experience economy. Fever inspires users to explore the best experiences in their cities while helping event organizers generate a very targeted demand. 

Since the pandemic has been disrupting our lives, the live entertainment, culture and experience economy has certainly been undergoing turbulent changes. Thousands of organisers such as museums, theatres and so on have had to make considerable efforts to adapt to continue to attract the mass public. Fever has been making it easier for these organizers to do so – making their experiences more accessible to a whole new audience across the world.

6. Dutch climate startup Sensorfact has just scored €13 million for its intelligent energy management and energy saving solution. Investment companies FORWARD.one, Korys and SET Ventures are all participating in the funding. 

Founded in 2016, Sensorfact has developed an Intelligent Energy Management System (IEMS). With this plug-and-play hardware and software, industrial SMEs can easily access and monitor their energy consumption in detail, reduce it with targeted actions and integrate it into increasingly strict energy reports.

In July last year, the European Commission presented the ‘fit for 55’ package, which aims to achieve a CO2 reduction of 55% in 2030 compared to levels in 1990. As a result, companies have to deal with increasingly strict regulations. Energy prices have also risen sharply in the past year, reaching a record high last December. Tech being offered by Sensorfact is going to prove indispensable in achieving carbon reduction targets and addressing price fluctuations. 

Sensorfact CEO Pieter Broekema, commented: “The energy bill is one of the largest costs that companies in the manufacturing industry are facing, especially with current energy prices. In addition, due to the wide interest in climate change, there are an increasing number of European regulations that companies have to comply with. With our technology, companies can kill these two birds with one stone.”

The climate tech startup supplies measuring equipment that can be easily installed by customers, giving insight into data around energy consumption – curial when looking at how to reduce consumption ad comply with regulations. With industry-specific algorithms, Sensorfact’s solution is then able to identify energy savings. This is complemented by energy experts who help with implementation. 

Looking for Funding?

iFund Lab helps startups to raise non-dilutive funding through SBIR & other federal programs.

7. As Techcrunch reported, Indian startup Moglix has more than doubled its valuation to about $2.6 billion from $1 billion just eight months ago as the Indian industrial business-to-business marketplace aggressively scales its offerings in many parts of the world.

Founded by IIT Kanpur and ISB alumnus Rahul Garg, Moglix operates a B2B marketplace and procurement platform for manufacturing goods that could be anything from a centrifugal pump to a fan to routers and pulse oximeters.

“We are happy to have the continued support and faith of our investors, customers, suppliers and team. We are excited to welcome Ward Ferry onboard. We are focused on our mission to enable creation of a $1 trillion manufacturing ecosystem in India,” said Garg in a statement.

“We will continue to invest in building technology and supply chain capabilities to enable growth of the manufacturing and infrastructure sector. Moglix will increasingly focus on growth driven by supply chain financing, acquisition of the right partners and global expansion.”

The startup says it serves 500,000 small, medium-sized businesses and enterprises.

8. Israeli Crypto Startup Fireblocks Soars With $8 Billion Valuation. In the summer of 2019, Fireblocks — headed by Shauolov and co-founded with Idan Ofrat and Pavel Berengoltz — was still a stealth startup, the clandestine phase in which startups develop under a shroud of secrecy before unveiling the product. Only then did it announce its initial, relatively modest funding round of $16 million. By last March it had become a unicorn, and in July, it completed a $310 million round on a $2.5 billion valuation. On Thursday, Fireblocks is announcing another round for a staggering $550 million at an $8 billion valuation. For those who didn’t do the math, Fireblocks’ valuation catapulted threefold within a mere six months, and it is now one of Israel’s three highest valued private companies, following Rapyd and Snyk.

The company owes its unusual quantum leap to its product: a secure digital platform for crypto transactions. The cryptocurrency market experienced a dramatic growth spurt over the past two years, hitting the $2 trillion mark before the current crash. Increasing numbers of traditional businesses are beginning to adopt cryptocurrency, and according to forecasts, this year alone a quarter of small businesses will be accepting payment in these currencies — Fireblocks is going with that flow. To date, the company’s platform boasts a 15% share of all cryptocurrency transactions. At the same time, crypto is carving itself a growing share of a broader arena: not that of private consumers but of the institutionalized financial industry. The crypto advocates dream of taking over or completely replacing these leviathan institutions, although the likes of Goldman Sachs and J. P. Morgan have recently established dedicated crypto units and are allowing clients to hold cryptocurrency and trade them. Naturally, Fireblocks is relishing these developments.

Now, in an exclusive interview with Calcalist’s supplement, Shaulov reveals what this stellar eruption looked like from within, and how it led to a total of one billion dollars in funding.

“Three things came into play here,” Shaulov explains in a series of Zoom interviews from the company’s New York offices. “Firstly, I think investors have begun to grasp that at least for now, Fireblocks is the dominant and triumphant player, or in investor lingo — ‘the one.’ An understanding that we have set the industry standard is starting to permeate the market. I’m wary of viewing us as the single solution, because we’re not, but we are the best solution in the market. The second thing was that our whole theory regarding the direction in which the market is heading with NFT, DeFi and digital payments is materializing — everything is unfolding exactly the way we said it would.

“The third thing is the fact that despite a certain inflation of prices and company valuations in the background, our value is sustained by a truly insane growth rate. We’ve had to update our annual forecast four times in the past year. Initially we adjusted our revenue forecast from $8 million to $25 million, followed by $35 million, and lastly to $45 million. We actually ended 2021 with $60 million in revenue — that’s growth of over 600% in one year, and for this year as well, we forecast a tripling of our revenue.”

9.The U.S. Department of Energy (DOE) today announced $35 million in funding for diverse small businesses to pursue scientific, clean energy, and climate solutions. The funding will support 158 projects across 29 states that will aim to develop an array of clean energy technology, from climate research tools to improved batteries for electric vehicles. This investment will create good-paying jobs, build a diverse climate workforce, and help achieve President Biden’s goal of a net-zero carbon economy by 2050.  

“Supporting small businesses will ensure we are tapping into all of America’s talent to develop clean energy technologies that will help us tackle the climate crisis,” said U.S. Secretary of Energy Jennifer M. Granholm. “DOE’s investments will enable these economic engines to optimize and commercialize their breakthroughs, while developing the next generation of climate leaders and helping to build a sustainable future to benefit all Americans.” 

10. Breakthrough Energy Catalyst, a private-public fund backed by Microsoft billionaire Bill Gates, is planning to help invest up to $15 billion into clean tech projects across the U.S., the U.K. and the European Union.

But Jonah Goldman, Breakthrough Energy managing director, told the Financial Times that the fund ultimately plans to mobilize 10 times that amount, or $15 billion. The difference is expected to come from private companies and governments around the world.

In order to deploy $15 billion, Goldman told the FT that the fund plans to use innovative financial structures and partnership agreements. “We are last-mile financing and so, we will be the most risky capital in there,” Goldman said. “We’re really trying to demonstrate which of the technological pathways are going to be most effective.”

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