| Here’s your daily Startups briefing: - 👥 Fintech startup Brex abandoned the co-CEO model and moved to a single-CEO structure
- 🌾 Agritech startups are floundering due to disconnect with farmers and lack of funding
- 🖼️ Voodoo acquired photo-sharing app BeReal for €500M
Thank you. Karan
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| 1 | | Fintech startup Brex, co-founded by co-CEOs Henrique Dubugras and Pedro Franceschi in 2017, is abandoning the co-CEO model and transitioning to a single-CEO structure. Franceschi will become the sole CEO, while Dubugras will become Brex’s chairman. This shift aims to enhance agility and decision-making as Brex scales up and prepares for a potential public offering in 2025 or later. More: - Brex, a corporate credit card and expense management company, has raised over $1.5B in total funding and serves more than 30,000 customers, including DoorDash, Flexport, Compass, Shein, and Roblox.
- Franceschi oversaw the development of Brex’s financial infrastructure since its founding, while Dubugras focused on fundraising and strategic relationships.
- The San Francisco-based startup was last valued at $12.3B two years ago.
- Despite a roller-coaster ride, including layoffs and management reshuffling, Brex has reduced its cash burn significantly and aims to be cash-flow positive by 2025.
- The company grew revenue by over 35% and gross profit by 75% in 2023.
- Brex claims to have a cash runway of four years.
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| 2 | | Well-funded agritech startups companies that initially sought to revolutionize farming practices through technology are floundering and have been unable to generate returns for investors. 
Relevance: Grain trading marketplace startup Indigo Agriculture is cutting down its business and laying off employees. The startup’s valuation dropped from $4B in July 2022 to $200M a year later. Gro Intelligence, which uses satellite data and AI to make crop predictions, is shutting down after failing to find a buyer, per sources close to the matter. Funding for the sector rapidly dried up after investor interest waned. Global agrifoodtech funding plummeted to $15.6B in 2023, nearly half compared to the previous year. What happened: One of the main reasons for the increasing number of failures is the disconnect between startups and farmers. Startups failed to properly understand farmers' core challenges, while growers were wary about sharing sensitive production information with startups. | | |
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| 3 | | French video game developer Voodoo acquired the popular photo-sharing app BeReal for €500M ($540M), making it its biggest acquisition to date. BeReal, which promotes authentic, unfiltered photo sharing once per day, exploded in popularity among Gen Z users in 2022 but has since seen stagnating user growth. Voodoo plans to monetize BeReal by introducing paid advertising on the platform in an effort to make it profitable. More: - Aymeric Roffé, head of Voodoo-owned social media app Wizz, will take up the CEO role at BeReal.
- Roffé says ads will be integrated in a "fluid" way to avoid damaging the user experience.
- While BeReal's 50M monthly active users have plateaued since late 2022, engagement remains high, with most users opening the app six days a week.
- Voodoo CEO Alexandre Yazdi expects to expand BeReal's global user base to around 100M active users within the next two years.
- In the short term, BeReal is expected to roll out features, including new ways to post, video options, and chat functionality.
- To date, the firm has raised $90M in total funding from investors, including Kima Ventures, an investment company co-founded by French Billionaire Xavier Niel.
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| 4 | | OpenAI CEO Sam Altman revealed the AI startup is on track to earn $3.4B in annual revenue by the end of this year. In an all-hands meeting, Altman said $3.2B will come from OpenAI's commercial products and services. Another $200M is projected from providing access to their AI models through Microsoft Azure. More: - This is more than double compared to its $1.6B annual revenue run rate reported late last year.
- Earlier in 2024, the company completed a tender offer valuing it at $86B.
- OpenAI has clearly emerged as an AI leader thanks to viral products like ChatGPT.
- The startup is now focused on monetizing its technology with enterprise customers to drive revenue.
- It is also developing even more powerful AI models to stay ahead of deep-pocketed rivals competing for the same business users and customers.
- To support this ambitious growth, OpenAI recently hired Sarah Friar, the former CEO of Nextdoor, as its first CFO in two years.
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| 5 | | The SEC has charged Ilit Raz, founder and former CEO of the now-bankrupt AI recruiting startup Joonko, with defrauding investors out of at least $21M. Joonko claimed to use AI to help clients find diverse candidates for hiring, but the SEC alleges Raz lied to investors about the company's capabilities, customers, revenue, and testimonials. More: - Raz allegedly told investors that Joonko had over 100 customers, over $1M in revenue, testimonials from major companies, and AI that could automatically match diverse candidates to jobs.
- The SEC says these claims were false and that Joonko did not actually have advanced AI recruitment technology, as claimed.
- When an investor questioned the validity of Joonko's numbers in mid-2023, Raz admitted to forging bank statements and contracts, and lying about revenue and customers.
- Joonko then wound down operations amid investor demands for repayment.
- Raz resigned as CEO in June 2023 and now faces SEC charges of violating antifraud securities laws as well as criminal fraud charges from federal prosecutors.
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| 6 | | Spacetech startup Apex closed its Series B funding round at $95M. XYZ Venture Capital and CRV co-led the round, bringing the startup’s total funding raised to date to $122M. The Los Angeles-based company will use the proceeds to ramp up production of its Aries satellite buses, the main structural component of satellites. More: - Apex recently opened a new factory to meet growing customer demands, including those from the U.S. Department of Defense.
- Other investors to participate in the current round include Upfront, 8VC, Toyota Ventures, and Robinhood co-founder Baiju Bhatt.
- With the fresh capital, Apex plans to increase its annual bus production capacity to 100 by 2026, complete the development and commence production of the Nova bus, and double its workforce by the end of 2024.
Zoom out: - VC investment in the spacetech sector showed an uptick this year, already raising $3.3B from investors.
- In the entire last year, spacetech startups secured $5.8B from investors.
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| 7 | | Quick Hits: - AI software startup Hugging Face acquired Argilla, a startup developing software that allows people to collaborate on improving AI datasets, for $10M. This marks Hugging Face’s fourth acquisition to date.
- Levitate Bio, a new startup developing software for drug development, agriculture, synthetic biology, and manufacturing, spun out from Seattle-based company Cyrus Biotechnology. Sam DeLuca, the former director of engineering at Cyrus, will lead the company as its CEO.
- Business efficiency software startup CModel Data Inc. is shifting its headquarters from San Francisco to Birmingham. The firm expects to create 80 more jobs as it grows.
- Humanoid robotics startup Foundation Robotics Labs is on the verge of raising the last $1M towards a $11M seed funding round, per internal documents seen by CNBC. The firm was co-founded by Synapse CEO Sankaet Pathak, Tribe Capital CEO Arjun Sethi, and Cobalt Robotics’ co-founder Mike LeBlanc.
- DataStrike entered the managed services provider industry with the acquisition of MiCore. Financial details of the transaction were not disclosed.
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 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Karan Chafekar |
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