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PopSockets unveils a photo case and accessory designer powered by AI.

by Ethan Carter November 8, 2023

written by Ethan Carter

Are you prepared to use your knowledge of AI prompts to customize products? PopSockets, a manufacturer of smartphone covers and accessories, is launching a novel AI Customizer tool today that enables anybody to create their phone accessory designs, such as wallets, grips, and cases, using an enhanced version of Stable Diffusion XL (SDXL). According to the business, the feature would enable users to express themselves in ways that a regular product catalog cannot wholly do by encouraging them to design distinctive and innovative bespoke cases and accessories.

Customers may visit a page on the PopSockets website and provide a prompt that defines the image they wish to use for the service.

PopSockets initially asks you to accept the terms and conditions, which include certifying that you are not violating anybody else’s rights and owning all the rights to the photographs you submit, before allowing you to begin using the service. Additionally, it states that PopSockets may refuse orders that violate company policies or include illegal content. The restrictions also apply to PopSockets’ contest, which offers rewards totaling $100,000 for the finest AI artwork, with a $50,000 grand prize winner to be announced in November. Additionally, winners will be notified every day until December 25, 2023.

You enter words into the supplied text box to create a picture. For instance, you may type “a fantasy land of rainbow flowy rivers, mountains, and cotton clouds” or any other thought that comes to mind.

In case you’re stuck, you may refer to trending images across categories and be directed to other themes, actions, places, colors, and styles using guided prompts. It will also provide you with some suggested prompts, such as “Neon Mountain,” “Cotton Candy Gradient,” “Futuristic New York,” and dozens more in various trending categories—currently including travel, floral, animals, nature, surrealism, butterflies, and patterns.

In addition, you can select from various styles under categories like artistic, realistic, unique, pattern, and mood, including photographic, cinematic, line art, comic book, fantasy art, landscape painting, impressionism, pop art, sketch, and many more. Additionally, the platform allows you to add a photo of a human or pet to an AI-generated scenario by using its optional backdrop removal tool (you could, for example, put your cat in space).

It just takes less than 60 seconds to create your ideas and artwork, after which you may edit the outcome, make new pictures, or use it on an already available product. The company’s well-liked PopSockets phone grips, phone cases, wallets (with standard and MagSafe variants), and soon-to-be-released Looks graphic phone case inserts are all supported by the AI Customizer.

According to the company, the PopSockets Customizer AI uses a large-scale model engine that, compared to other text-to-image generators currently on the market, creates images with “superior resolution, finer details, and more realistic images.” This is required since the pictures can’t be seen on a computer screen but must be printed on items.

Regretfully, the AI isn’t always entirely accurate. For instance, I requested a picture of a unicorn (yes, I am a 10-year-old girl), but in one example, I got images of a white horse with two horns, no horns, or a drooping horn.

The trumpet was occasionally off-center. In another, the unicorn had something dangling from its eye, maybe an earring, and appeared to be attempting to devour its flower necklace.

However, the AI Customizer produced more useful possibilities when I asked it to create three additional photos. However, in several instances, it disregarded requests such as “with a flower necklace.”

It’s not a good idea to rely just on the given instructions, as your outcomes could not vary significantly. For example, when I selected “futuristic New York” as my sole choice, I received four images of tall skyscrapers covered in vegetation. However, you would receive a more excellent range of options if you added additional parameters to your request, such as requesting a future New York with neon signs and flying automobiles.

Unless stated otherwise, the outputs can be inconsistent, like with AI picture generators seen online, and it could require many attempts to achieve the desired quality of photos.

Naturally, though many do, you are not required to use the new function to conjure magical images. Instead, you may utilize it to produce a more polished, better-looking picture of your subject against the backdrop of your choice. You may use the tool to add text or stickers to your picture if you’d like.

PopSockets is helpful because it lets you see how your image will appear on your product before you check out. This is very useful if, for example, your picture has to be zoomed out or shifted about to make room for the phone’s camera array. Alternately, you might find that the image isn’t a good fit for the tiny space a phone grip provides and want to go back and fix it.

Afterward, you may add the product to your basket for the regular price, just like any other item from the website’s catalog. Gary Schoenfeld, CEO of PopSockets, stated in a statement regarding the introduction, “This innovative use of technology allows users to create a truly unique accessory for the product we use more than anything else—our phones.” “We can’t wait to see the creative possibilities this holiday season and beyond bring to our community—this advancement in AI technology truly reflects that imagination is limitless,” he added.

November 8, 2023 0 comment

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Ozone raised $7.1M to scale its AI-powered collaborative video editor in the cloud.

by Alex Turner November 8, 2023

written by Alex Turner

The creator of an AI-powered cloud-based collaborative video editor called Ozone has secured $7.1 million in early money and is putting their product into open beta. The former Y Combinator employee wants to provide video producers with AI support so they can finish time-consuming editing jobs quickly—instead of hours. Ozone intends to provide content producers with tools to make entertaining films more rapidly and effectively, not to replace human creativity with AI.

Max von Wolff founded Ozone in 2021. It is an in-house AI assistant that suggests user activities to perform when editing videos. The program offers real-time, Figma-like collaboration, limitless cloud storage, and video editing capabilities. With AI’s assistance, you may execute various tasks, like adding music, adding subtitles and animations, removing silences, color correcting, and more.

“I studied computer science at MIT,” von Wolff said in an interview with TechCrunch. “My desire to pursue creativity grew. This cloud computing course I was taking sparked my interest in developing cloud-based creativity software that encourages people to be at their most creative. I chose to drop out of MIT as a sophomore and attend Y Combinator despite being an international student. That’s how we got things going. We’re creating the first AI-driven collaborative video editor in your web browser.

Engineers, designers, and product managers comprise Ozone’s nine-person team from Adobe, Frame.io, InVision, and Disney. Customers can submit their videos to Ozone and instantly apply various AI functions to complete tasks that would otherwise require a lot of manual labor. For example, you may easily remove pauses and times when you say “um” or “uh” from a video you publish.

At first, Ozone focuses on content marketers and artists who produce short-form videos for applications such as YouTube, Instagram, and TikTok. With time, Ozone intends to expand its editing skills, focusing on producers of longer material, such as movies and documentaries.

Van Wolff claims that although Ozone has many professional-grade editing tools offered by Adobe Premiere Pro and Final Cut Pro, these programs are complex and do not facilitate teamwork.

Van Wolff remarked, “If you look at the landscape, there is Adobe; they’ve been in the game for many decades, but their tools are very difficult to use.” They’re all offline and jumbled as well. In them, you cannot work together. Many individuals are irritated with the current answer. And we genuinely want to provide them with a tool that is just as powerful, if not more so, but with a degree of ease of use that I believe the industry has never seen before.

The startup intends to use a freemium business model when Ozone is live. While businesses will pay enterprise pricing that has not yet been determined, individual Pro users can access the program for just $29 monthly.

Regarding the money, the business intends to utilize it to expand the platform’s capabilities and add new features, such as more AI functionality, that will probably emerge in the upcoming months.

Along with the creators of Dropbox, Tinder, and Lightricks, the round featured financing from Y Combinator, NEA, General Catalyst, LGVP, Bluewatch Ventures, Polymath Capital Partners, Pioneer Fund, SOMA Capital, and Olive Tree Capital.

Van Wolff remarked, “I believe that we’re just getting started serving a small part of the market here in terms of the next ten years for Ozone.” “In order to cover additional sectors and use cases within our platform, we want to offer more functionalities. Regarding artificial intelligence, I firmly believe that in the next year or two, we will make further strides that will enable people to produce precisely what they envision, more quickly, and with a high level of quality.

November 8, 2023 0 comment

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Code-generating AI platform Tabnine nabs $25M investment

by Alex Turner November 8, 2023

written by Alex Turner

Because AI technologies provide the benefits of faster learning and improved productivity, developers are prepared to use them. In a recent poll, 77% of developers felt optimistic about incorporating AI into their workflows, and 70% said they plan to utilize AI coding tools this year.

Additionally, investors see promise in generative coding tools, especially in what they can do on an enterprise level. And for businesses like Tabnine, which recently disclosed that it raised $25 million in a Series B fundraising round with participation from Atlassian Ventures, Elaia, Headline, Hetz Ventures, Khosla Ventures, and TPY Capital, this enthusiasm is translating into additional money.

To establish a platform that incorporates generative AI into different stages of the software development lifecycle, Dror Weiss and Eran Yahav co-founded Tabnine in 2012. Weiss is a graduate of the Israel Institute of Technology’s Technion, where Yahav was, and a computer science professor.

Tabnine offers Tabnine Chat, an AI “code assistant” that creates code and responds to inquiries about an organization’s codebases, similar to ChatGPT for code, and additional coding tools driven by first- and third-party generative AI models.

Amazon CodeWhisperer and GitHub Copilot are two rivals of Tabnine. However, Weiss claims that compared to competing systems, the firm offers greater customisation and control. For instance, clients can use a virtual private cloud or on-premises to implement the tools.

In an email conversation with TechCrunch, Weiss said, “Our flexible architecture means we can switch [code-generating AI] models relatively easily and are thus not ever competing with the big generative AI model builders.” “We can provide developers with access to new models from other vendors and adapt with AI as it develops; Tabnine can enable developers to use those models wherever they code.”

Weiss also argues that, from a business standpoint at least, Tabnine poses less legal danger than its rivals.

In a class action lawsuit, Microsoft, GitHub, and OpenAI are being sued for allegedly breaking intellectual property laws by allowing Copilot, who was trained on billions of examples of publicly available code from the internet, some of which were subject to restricted licenses, to repeat portions of copyrighted code without giving proper credit. Some lawyers say businesses could be in legal trouble if they accidentally add copyrighted suggestions from AI systems like Copilot to their production software. This is in addition to the liability issue.

Weiss points out that Tabnine only employs AI models trained on code with permissive licenses or collaborates with clients to train models on their codebases.

“We have much better control and security because we use a curated data set and know what has gone into it,” Weiss stated. Additionally, thanks to this basis, our clients use private models built on their code and operating in their data centers and virtual private clouds.

Tabnine’s strategy is effective, especially considering the demise of Kite, one of its competitors, towards the end of last year. While not quite as large as Copilot’s, with around one million paying users and 37,000 corporate clients, Tabnine’s user base of over a million and 10,000 customers is still significant.

According to Weiss, Tabnine plans to use the cash from Series B, which increased the company’s total funding to $55 million, to enhance its generative coding skills and bolster its worldwide support and sales teams. Compared to now, Tabnine anticipates having 150 workers by the end of the year.

November 8, 2023 0 comment

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STARTUPS

Cast AI, which helps companies optimize cloud spend, lands $35M

by Alex Turner November 7, 2023

written by Alex Turner

The widespread adoption of digital during the pandemic and the acceptance of generative AI increased cloud use, and this tendency hasn’t changed. Quite the reverse; according to Gartner, end-user expenditure on public clouds will grow to over $599 billion globally in 2023 from $421 billion in 2021 and almost $500 billion in 2022.

Not every business has successfully adapted to the new standard. Overspending is one issue they’re facing; a recent Forrester study found that an astounding 94% of companies claim to have incurred avoidable cloud expenses as a result of underutilized and overprovisioned resources, a shortage of internal talent to manage cloud infrastructure and other related issues.

FinOps, a whole new product market created to abstract away cloud orchestration and optimization activities, was born out of the unmanageable challenge of tracking and minimizing cloud costs. Amidst the increasing competition in the industry, Cast AI has emerged as a very prosperous initiative. The business recently disclosed that it had raised $35 million in a Series B round, with Vintage Investment Partners as the lead investor and Creandum and Uncorrelated Ventures participating.

With this additional funding, Cast AI has raised $73 million. According to CEO Yuri Frayman, the funds will be used for product development and expanding the startup’s staff of slightly over 100 people.

In the current economic climate, “every startup needs to respond to a basic question: ‘Will our business experience revenue contraction or will it grow massively and benefit from economic headwinds?'” In an email interview, Frayman revealed this to TechCrunch. Many business-to-business software-as-a-service providers are seeing a slowdown in growth or contraction due to client efficiency and cost-cutting initiatives. Because we save clients money on their cloud expenditures, enhance performance and dependability, and increase DevOps and engineering efficiency, our business is expanding quickly.

In 2019, Frayman, Leon Kuperman, and Laurent Gil co-launched Cast AI. The three drew inspiration from their experiences growing Zenedge, a cloud-based cybersecurity company that Frayman, Kuperman, and Gil had previously co-founded and that Oracle acquired in 2018. There, they had difficulty controlling cloud expenses.

Frayman stated, “Even though we received monthly statements with detailed line-item expenses, we lacked a practical method to truly cut those costs and maximize our cloud resources.” “We discovered very quickly that we weren’t alone.”

Frayman and his team set out to create Cast AI to create a platform that could automatically scale up and down cloud consumption while optimizing for cost and providing insights into the active provisioning of cloud resources, particularly Kubernetes clusters.

Clusters are groups of computers running software that are part of Kubernetes, an open framework for automating software deployment and administration within environments known as “containers.” Through its connections to public clouds such as AWS, Google Cloud Platform, and Azure, Cast analyzes and tunes these clusters across servers autonomously using models. The dashboard for optimizing cloud consumption and budget using Cast AI. Picture courtesy of Cast AI

“Our models are trained using millions of utilization data points that are gathered every 15 seconds, which include anonymized CPU and memory utilization across all cloud providers and global regions,” Frayman said. We may forecast reduced computation costs to influence batch task scheduling. It’s similar to using Kayak to find a less expensive trip and rescheduling it for a later time. Additionally, the Cast AI platform may be proactive rather than only reactive to the demands of the present workload because we have customer-specific models for workload seasonality.

Cast AI faces competition from FinOps firms such as Exostellar, which raised $15 million in September for its suite of solutions to optimize cloud spending at the “enterprise-level.” A few of the other businesses vying for a piece of the emerging FinOps market—which is expected to be valued at $2.75 billion by 2023—are CloudZero, ProsperOps, Finout, Vantage, Ternary, and Zesty.

However, Frayman argues that there is a surplus of demand for FinOps solutions, which is advantageous for Cast AI. And he may be in error. Wakefield Research from 2023 states that over three out of ten developers, engineers, and executives plan to prioritize FinOps expenditures this year. According to 74% of the participants, FinOps is now considered equally significant as other well-known IT specialties like SecOps and DevOps.
“Our impact becomes more relevant to the C-Suite as enterprises become more cloud-native,” Frayman stated. To handle the FinOps dilemma, customers turn to firms like Cast AI for their solutions since they require an objective source of truth. We are ultimately in charge of ensuring that customers save money, and we do that regardless of how much money Google, Amazon, or Microsoft make.

November 7, 2023 0 comment

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Sift raises $7.5M to build a telemetry stack for the ‘digital backbone to the physical world.’

by Alex Turner November 7, 2023

written by Alex Turner

A top-notch software stack is necessary for suitable hardware. Telemetry, or the gathering of vital real-time data on machine performance, is one of the stack’s components that best exemplifies this idea.

For hardware projects, a poor telemetry system might be fatal; thus, many businesses depend on costly, intricate solutions, such as combining many open-source telemetry tools created and maintained by a small team of engineers.

Two former SpaceX engineers launched the firm Sift, which aims to improve that with an end-to-end telemetry stack that enables “sifting” through machine data easier, less expensive, and more efficient.

Austin Spiegel and Karthik Gollapudi launched the Los Angeles-based firm in mid-2022. The two concluded that SpaceX’s excellent internal software tools, such as telemetry, are primarily responsible for the company’s success in hardware development.

Spiegel stated in a recent interview that “all of that software is what is the secret sauce of SpaceX that a lot of people don’t see because it’s not public.”

The two creators ought to be aware. Gollapudi led the flight software operations team for the Dragon spacecraft during his four years at SpaceX, while Spiegel worked on internal tools such as manufacturing systems, test automation systems, and the telemetry system for Starlink for almost five years (not including an internship). (Gollapudi told his manager he was leaving to start Sift the day he signed the launch readiness evaluation paper for a Dragon mission.)

After witnessing the disaster of Boeing’s Starliner OFT-1 demo trip in 2019, the two began considering telemetry-related problems. Gollapudi stated, “When I saw that, I was thinking it was some kind of hardware failure.” “If you read the Boeing press release, they stated [something like] ‘We had these cascading series of software failures due to poor software development practices and poor software testing.'” The fact that it was all software made it absurd, and for me, it was mind-blowing.

He said, “I realized that most people don’t build hardware the way SpaceX does.” Austin Spiegel and Karthik Gollapudi are the creators of Sift. Picture Source: Sift

The $7.5 million in investment the company has closed to expand its offering is evidence that investors have reacted favorably to Sift’s solution. Leading hardware investor Riot Ventures, enterprise SaaS investor Fika Ventures, and First Resonance, Datum, and Duro are among the investors contributing funds. The fund, Earthrise Ventures, founded by former SpaceX employee Scott Norman, gave the crew their first check.

Three pillars support Sift’s telemetry stack: storage, real-time analytics, and visualization. According to the two creators, these provide essential features to quicken hardware creation. Engineers can, for instance, compare sensor data from rocket engine testing precisely at engine ignition to time-aligned sensor data around the same event.

That’s why we’re constructing this massively influential infrastructure: to enable you to perform these historical longitudinal queries, such as “Hey, how did this engine look the last 100 or 1,000 times I fired it?” What is the comparison with the present? Stated Gollapudi.

Additionally, Sift’s stack encapsulates all machine behavior logic and rules such that, while the machine is in the field, the system only calls for an operator when anything is seriously going wrong. According to Gollapudi, this is a paradigm shift, as Sift incorporates institutional knowledge about machine behavior and encodes it from the start rather than gathering data and manually monitoring it. Additionally, Sift’s system makes use of object storage, which is a highly affordable cloud data storage solution, increasing the product’s affordability for smaller clients.

The firm wants to double over the next 12 months from its current ten engineers. Paying clients from various sectors, such as Parallel Systems, an autonomous electric train business established by a group of former SpaceX employees, are already using Sift’s technology.

November 7, 2023 0 comment

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ReturnGO, with $5M more, now powers product returns for Amazon Multi-Channel Fulfillment.

by Alex Turner November 7, 2023

written by Alex Turner

Returns occur often when people shop. But as more people shop online, shops are seeing more buyers purchasing the same item in many sizes to return what doesn’t fit. The returns procedure has become somewhat disorganized as a result.

Retailers have missed out on sales and have to pay to restock that item in their inventory, depending on how they handle returns. According to the National Retail Federation, returns cost American merchants about $816.7 billion in lost revenue in 2022. That is how serious the issue is.

There are a plethora of businesses striving to address such a significant issue. But it’s not every day that a tech-savvy person catches the eye of shipping giant Amazon.

ReturnGO and Amazon Multi-Channel Fulfillment have reached a deal wherein ReturnGO would supply its return and exchange procedure to those 300,000 merchants on Amazon’s third-party logistics infrastructure for online sales. This announcement was made today.

ReturnGO’s co-founder and CEO, Aviad Raz, told TechCrunch, “We already have merchants in beta and are working with Amazon to educate them on this solution.” Since we are experiencing a recession, cutting expenses and holding onto money are crucial. Growth and returns continue to be consistent. Although major companies are beginning to charge for returns, this is not yet big enough to cause problems for customers wishing to return goods.

Established in 2020 by Raz, Assi Abramovitz, and Eyal Rosenthal, the firm presently employs 45 individuals in Israel, the New York region, and the Philippines. ReturnGO, according to Raz, offers return choices and a “post-purchase operating system” that attempts to lower reverse logistics costs for online merchants and increase the sustainability of the entire process.

ReturnGO’s automated return and exchange procedure, according to Raz, provides clients with additional return alternatives and can be utilized with any e-commerce tech stack, making it unique. This involves simplifying the product exchange scheme to lessen the requirement for shops to provide complete refunds.

Approximately 2,700 Shopify merchants already utilize its software-as-a-service solution to handle about 283,000 returns monthly. This adds some intrigue to ReturnGO’s timing. In May, Shopify sold its logistics division to Flexport. Then, in August, Shopify and Amazon teamed up to allow users to order things on Shopify and have them fulfilled by Amazon. According to Raz, most American retailers may now use ReturnGo to handle third-party logistics.

According to Raz, the company’s recurring income is $1.8 million annually, a 2.5-fold increase from the previous year. Alongside this new agreement, Trestle Partners led the company’s acquisition of an extra $4.8 million in growth capital. In June of last year, ReturnGO secured $6.5 million in startup investment.

According to Raz, the business now has a runway that extends until April 2025, and it is progressively moving up the midmarket and into the enterprise. ReturnGo has lately made available in beta a tracking service that allows customers to receive alerts at every stage. The business intends to offer packaged solutions with tracking and refunds once they are prepared.

Additionally, it works with businesses that wish to pick up, donate, or further upsell returned goods. Raz is also seeking positions in sustainable sales and go-to-market. Raz said the company intends to raise a Series A early next year.

November 7, 2023 0 comment

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Flavrs, a shoppable video app for foodies, launches a new takeout feature and AI-powered recommendations.

by Alex Turner November 3, 2023

written by Alex Turner

Flavrs is an iOS app that allows foodies to find recipes and then buy ingredients. Through a bespoke interface with OpenAI, the app provides AI-powered recommendation algorithms and a new takeaway function. Videos from famous chefs and producers are displayed on the app, which has a UI reminiscent of TikTok. By using an Instacart integration, you may purchase the ingredients to prepare the cuisine you want without ever leaving the app.

Former Google engineer François Chu and Alejandro Oropeza, the former global manager of creative marketing for YouTube, founded Flavrs in September 2022. The firm has secured $7 million in initial investment from prominent chefs Wellington Access Ventures and Andreessen Horowitz.

With these updated features, Flavrs is evolving from being an app that finds recipes that you can purchase to one that finds meals that you can order. Flavrs will connect you to Uber Eats and other delivery services to complete your order if you see a video from a restaurant and wish to purchase takeout.

“Consider having access to the best food videos and being able to purchase anything you see, including ingredients and takeout,” Oropeza stated to TechCrunch. This entails purchasing your preferred chef-approved cookware—such as pans and knives—all in one location, in addition to ordering goods from Instacart and takeout from Uber Eats.

In regards to the new AI-powered recommendation systems, the startup has introduced a customized integration with OpenAI that will enable users to receive personalized video content from creators on the app across more than thirty food categories, such as cuisine, technique, allergens, preparation complexity, dietary restrictions, cook time, and more.

Oropeza claims that content creators use the platform by dragging and dropping movies, then plain text recipes, onto it.

“With our proprietary integration with OpenAI, Flavrs has an industry-first feature that takes these plain-text recipes and turns them into smart videos that can be shoppable, cookable, and fully understood by our systems as food rather than just video, allowing the content to be recommended to users in unique and personalized ways,” Oropeza stated. Additionally, this functionality makes life easier for creators—AI tags and filters content for content creators in seconds, saving them hours of labor.

According to Oropeza, a bespoke integration transforms a series of textual elements into individualized, exciting material that is tailored to the individual interests of each viewer.

Flavrs’ user base has increased 80 times since going covert last year, and in the previous three months, the app’s creator community has expanded by eight times. Oropeza states Flavrs hopes to “connect the world through food” by tying premium cuisine content to actual events and business.

For the 500 million or more people who live to eat, Oropeza stated, “As things scale, our vision is to become the category-defining food content and commerce experience.” “By doing this, we will create a platform where the world’s top chefs, food content producers, and neighborhood eateries can interact with incredibly interested audiences globally in an ecosystem that benefits everyone.”

November 3, 2023 0 comment

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Norrsken22’s debut fund closes at $205M to back growth-stage startups in Africa.

by Alex Turner November 3, 2023

written by Alex Turner

With Norrsken22, a pan-African venture capital firm, reaching the final closure of its maiden fund and raising a total of $205 million, exceeding its initial objective, it’s an exciting time for growth-stage investing in Africa. This further demonstrates institutional investors’ strong interest in helping African businesses during a critical stage of development.

Five individuals with a wealth of venture capital and private equity expertise founded Norrsken22: general partners Ngetha Waithaka and Lexi Novitske, managing partner Natalie Kolbe, and founding partners Niklas Adalberth and Hans Otterling. This nearly two-year-old venture capital business has operating teams in Ghana, South Africa, Kenya, and Nigeria.

After completing the first close at $110 million, the partners launched the fund in January last year under the Norrsken 22 African Tech Growth Fund. Thirty unicorn entrepreneurs worldwide contributed around 59% of the capital. These founders included Olugbenga Agboola, CEO of Flutterwave; Niklas Zennström, co-founder of Skype; Jacob de Geer, co-founder of iZettle; and Niklas Östberg, co-founder of Delivery Hero.

Fundraising for Norrsken22 started during a period of notable financial inflow into the technology industry. The company sought to complete the final closure by the end of 2022 in addition to having conversations with several family offices and development finance institutions (DFIs), which is a need for raising a sizable fund in Africa. Since then, though, there has been a downturn in the global digital investment scene, which has affected all forms of fundraising, including that from institutional investors. The venture capital invested in Africa in 2022 was between $5 and $6 billion. According to statistics from The Big Deal and Briter Bridges, it has decreased from $2.5 billion to $3.4 billion thus far in 2023, keeping with the general downturn in venture capital activity.

The present downturn in technology investments resulted in a one-year postponement of Norrsken 22’s ultimate closure. Nevertheless, given the difficulties several VC firms—both domestic and international—continue to face in obtaining capital or concluding deals, this achievement is remarkable. The fact that the expansion fund was oversubscribed makes this even more impressive. Kolbe, the managing partner, credits the accomplishment to a resurgence of fundraising activity that began in early 2023. She said that the fund’s success was mainly due to the backing of other limited partners, primarily the founders of unicorn firms and the founding team of Norrsken22’s vast expertise in making investments in Africa.

Following the fund’s original close, which was aided by the SEB Pension Foundation and a few family offices, new limited partners for Norrsken22 included Standard Bank, British International Investment (BII), International Finance Corporation (IFC), U.S. International Development Finance Corporation (DFC), and Norfund.

International funds typically lead large deals in Africa, with local investors concentrating mainly on pre-seed to Series A rounds with more modest to medium-sized funds. Big Africa-focused funds such as Norrsken22 seek to close the gap between growth and late-stage capital. According to Kolbe, around half of Norrsken’s funding will go toward helping its portfolio grow through Series A and B firms. The remaining portion will be set aside for follow-on investments, mainly in the B and C rounds.

“Entrepreneurs developing fintech, edtech, medtech [health tech], and market-enabling solutions that will deliver strong returns and have a positive impact across Africa” is the firm’s stated emphasis. The challenger bank TymeBank, the B2B commerce retail platform Sabi, the identity verification service Smile Identity, the auto financing platform Autochek, and the finance app for informal merchant communities Shara are among the five investments made thus far by the Pan-African growth-stage fund.

“We provide value to firms that want to expand internationally and establish multinational, Pan-African enterprises. “We were able to provide the companies with people on the ground and networks on the ground, and we also understand the nuances of growth and opportunity in each of our markets,” Kolbe said regarding Norrsken’s investment strategy. “We have three general partners in the beacon economies of sub-Saharan Africa: Nigeria, Kenya, and South Africa.” Additionally, these businesses seek a significant investor who can lead and support them in subsequent stages. That has grown to be crucial, especially in light of the continent’s current tightening liquidity conditions.

The goal of Norrsken22 is still to invest in about 20 businesses. The average investment ticket size for the fund is around $10 million. However, as the partners said in a prior interview, it might reach as high as $16 million, covering follow-on rounds in certain portfolio businesses.

Like Norrsken22, several other growth-stage companies have raised one to two funds in recent years to address the lack of finance in Series A and beyond, including Partech Africa, TLcom Finance, Algebra Ventures, Sawari Ventures, and Novastar Ventures. But some of them have also made investments in the pre-seed and seed phases, which is something Norrsken22 may look into if the proper chance presents itself. A tiny sum has been set aside for the early, most suitable period. We may invest small sums of money if something great comes our way, but that is not where our concentration is,” said Kolbe.

As it happens, a growth stage fund’s investment strategy places a lot of emphasis on getting portfolio firms ready for exits. Regarding the general partner’s statement, Norrsken22 conducts a comprehensive assessment of the possible exit scenarios. This involves identifying prospective buyers for the firms in its portfolio and evaluating the potential valuations that these purchasers could provide after the investment period expires. She said that the business has rejected investments when a strong exit strategy was not apparent and that this scrutiny is essential.

According to the managing partner, the company is considering consolidation involving regional industry leaders and exits for its portfolio firms through foreign strategic purchasers. Startups may also be able to go through multinational firms in Africa. Since some of these organizations find it challenging to develop internally, they may look to acquire tech startups that they can either keep as independent entities under a new name or incorporate into their operations. An advisory group of corporate executives from international corporations in the banking, telecommunications, real estate, and agriculture sectors supports Norrsken22’s first fund.

November 3, 2023 0 comment

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Bee Partners closes fourth fund to add more capital for pre-seed founders in deep tech.

by Alex Turner November 2, 2023

written by Alex Turner

Bee Partners seeks to work with pre-seed companies to create innovative products in the deep tech domain. The fourth fund concluded with $50 million in pledges; managing partner Michael Berolzheimer stated it was oversubscribed.

The San Francisco-based venture capital firm makes investments in businesses that are primarily concerned with robotics, machine learning, artificial intelligence, and emerging technologies. Berolzheimer expects more innovation to emerge from labs than ever in deep tech. So much so that, despite a slowdown in investment for the sector, Bee Partners had a 40% year-over-year rise in transaction volume, he added. Dealroom.co reports that in the second quarter of 2023, deep tech remained the second most invested category after energy.

Given the disruption and innovation emerging from that industry, he stated, “The challenge is that a lot of deep tech companies are getting funded, just not necessarily getting the funding that we think it deserves.” Deep tech is so vast that such a remark is sweeping. Though it is a little more covert, there is still a lot of action going on.

LPs of the business include family offices in the United States and a university endowment in Boston. It is one of the few pre-seed investment firms that recently closed on fresh funds, joining the likes of Garuda Ventures and Onvi Capital.

But Berolzheimer clarified to TechCrunch that Bee Partners is not like other venture capital firms, adding that his company is one of the few that is prepared to make such substantial investments at such an early stage.

“We like to say, ‘no code, no problem, no customers, no capital,'” he stated. Even if the business isn’t yet formed, we’ll invest in a team that has a fantastic idea. Just a few days after our incorporation, we are writing that first check, and we feel safe doing so. It’s pretty unusual for a founding team to be able to take home $500,000 or $1 million at once.

The partnership arrangement of Bee Partners is another distinctive feature—hence the name. Founders at Bee get to collaborate with the entire team of partners, whereas other companies usually assign one person to each portfolio business, according to Berolzheimer.

Twenty percent of Bee Partners IV’s money has already been invested in nine businesses, three using generative AI. Nova raised $2.4 million for brand integrity protection products. This year, it also co-led a seed round at Wellplace, a platform for dental practices to purchase products. It invested in Series A fermentation technology startup Pow. Bio.

The business has committed slightly over $130 million, making this its largest fund. At $43 million, its third fund was completed in 2019. Each fund that Bee Partners invests in generally comprises 25 firms over four years. It has invested as little as $350,000 and as much as $1.5 million, with an average check size of $800,000. The business claims that over 60% of portfolio firms are matriculated into Series A.

“We chose to maintain our focus at that 25-point point,” Berolzheimer stated. “It allows us to devote more time and effort to each of our businesses, which is the main reason we founded Bee Partners in the first place: to assist entrepreneurs from the ground up. We assist them with achieving product-market fit so they may go on to Series A.

November 2, 2023 0 comment

STARTUPS

Xage Security raises $20M more to expand its security platform

by Alex Turner November 2, 2023

written by Alex Turner

Even though the number of funding transactions for cybersecurity peaked in 2022, this does not indicate that the industry has peaked—far from it. In Q2 2023, 148 agreements totaling $1.6 billion were made, according to Statista.

Also, there appears to be a robust transaction flow for Q3, at least anecdotally. As an illustration, consider the news released today by Xage Security, a firm that develops software to prevent network attacks. The company has received $80 million in total and has raised $20 million in a B2 fundraising round.

Piva Capital, March Capital, SCF Partners, Valor Equity Partners, Overture Climate Fund, Chevron Technology Ventures, and Science Applications International Corporation were involved in the B2 round of Xage. TechCrunch has learned from a person with knowledge of the situation that the pre-money value is around 60% more than its pre-money as of January 2022, the month the business closed its Series B.

The funds will go into R&D and Growth’s go-to-market operations, emphasizing increasing its footprint in the Asia-Pacific area, according to Geoffrey Mattson, who was named CEO of Xage in September.

In an email interview, Mattson told TechCrunch, “Xage has seen strengthening tailwinds versus headwinds given the threat environment and customers’ needs, and cybersecurity attacks on critical infrastructure are on the rise despite the mixed tech economic condition.” It is now more crucial than ever to provide zero-trust security solutions for critical infrastructure and dispersed operations, including operational technology, IT, and cloud environments. This is because more and more firms are operating remotely to cut expenses.

After seeing that assaults on Internet of Things (IoT) devices, such as temperature sensors and security cameras, were becoming more frequent, Susanto Irwan and Roman Arutyunov established Xage in 2016. (The trend continues; the average weekly number of assaults per business targeting IoT devices increased 41% in the first two months of 2023 compared to 2022.)

Irwan and Arutyunov created Xage to create a cybersecurity platform that could defend operational technology, or the hardware and software used to monitor, operate, and improve industrial processes, whether cloud-connected or not.

The leading solution is installed on top of settings already in place, supposedly without changing the network, as part of an on-premises or software-as-a-service installation. The company watches how devices interact, data moves, and changes happen on its network to find policy violations and carry out security measures like requiring multi-factor authentication for system logins from unknown sources.

Regarding platforms for securing industrial and IoT systems, Xage is undoubtedly not alone in the industry. Perhaps the most significant competitor, at least in the startup space, is Dragos. However, Xage has done well in acquiring clients; it got contracts for $743,000 and $17 million with the U.S. Air Force and the U.S. Space Force.

Utility, manufacturing, transportation, and energy infrastructure operators are amXage’sge’s other clientele. In the first half of 2023, Mattson reports that the firm, with about 90 employees, had a 420% increase in revenue and a 560% increase in bookings year over year.

“Xage saw a brief pause in demand when the pandemic first hit as customers tried to sort out their business,” Mattson added. Fortunately, Xage enjoyed a smooth launch as businesses increasingly view data security and information as essential to their operations.

November 2, 2023 0 comment

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