Welcome to Startup Monday, my weekly newsletter that recaps the week in the global startup ecosystem. To have this newsletter emailed to you, you can sign up here.
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Top startup news to follow this week:
Exponent Founders Capital, an early-stage venture firm founded by alumni of startups such as Plaid, Robinhood and Ramp, has closed on $75 million in capital commitments, TechCrunch is the first to report.
The firm, which is emerging from stealth today, raised $50 million for its first fund in November of 2021.
Managing Partners Charley Ma and Mahdi Raza co-founded Exponent after meeting while Ma was leading fintech growth at Plaid, and Raza was leading growth and payments at Robinhood. At the time, Robinhood was one of Plaid’s largest customers, so the pair often found themselves on opposite sides of the negotiating table.
The pair invested separately as angels before teaming up to start their own venture firm.
Exponent, which focuses on enterprise SaaS, fintech, infrastructure and GTM (go to market) software companies, invested in about 40 startups out of its first fund. Among those startups are Apollo.io (which raised $100 million at a $1.6 billion valuation in August), observability platform Chronosphere (which raised $115 million at a $1.6 billion valuation in January) and legal-tech startup EvenUp (which raised $50.5 million in June).
The firm has already had some exits, as well, including software startup Tactic being sold to TaxBit earlier this year and other deals Ma says will be disclosed “soon.” As angel investors, the pair backed the likes of Modern Treasury, Unit, Moov, Lithic, Persona, Stytch and Persona, among others.
Ma was one of the first business hires at Plaid where he led the fintech and developer sales vertical in San Francisco and helped build out the company’s New York office. Later, he was one of the first business hires at expense management startup Ramp and helped launch its corporate card as that startup’s head of growth. More recently, Ma served as the head of growth at Alloy, an identity and risk infrastructure platform for financial institutions.
Artificial intelligence startups had a wild ride in 2023. Everyone and their grandmother tried out some sort of AI tool, startups in the space raised rounds at 2021 valuations, there were high-profile shutdowns, and then to close out the year, we had all the drama surrounding Sam Altman and OpenAI — plus New York Times’ lawsuit against the company.
With so much in the rearview mirror, it’s hard to predict what will happen with AI startups in 2024. But some people, like investors, make their living from shrewd bets, so TechCrunch+ recently asked more than 40 investors what they think AI investing could look like in 2024.
Most investors told TechCrunch+ that they expect the current swell of funding to continue but were optimistic that the industry is moving past its initial hype cycle and toward more durable businesses. They also think that 2024 could see the beginning of a second wave of AI startups that are more verticalized, that are focused on specific sectors, and that move away from building layers on top of technologies from companies like OpenAI and Google.
Lisa Wu, a partner at Norwest Venture Partners, expects opportunities in verticalized AI to be particularly attractive this year. She thinks that there could be lower risk in investing in these startups, as they won’t be as likely — or easily — replicated by legacy companies like Microsoft and Google.
Goldman Sachs Asset Management said on Wednesday it had raised $650 million for a new fund that will invest in startups related to the life sciences sector.
The fund, West Street Life Sciences I, will specifically target early to mid-stage therapeutic companies with multi-asset portfolios as well as tools and diagnostics firms.
“Life sciences represents one of the most exciting areas in the private investing landscape, with advances in technology transforming healthcare at an unprecedented pace,” said Marc Nachmann, global head of Asset & Wealth Management at Goldman Sachs.
Goldman said Life Sciences I has already committed about $90 million to five companies, including cancer drug maker Nested Therapeutics and precision medicine firm MOMA Therapeutics.
The company had raised about $4 billion for its infrastructure fund, West Street Infrastructure Partners IV, last year.
Paris-based startup Nabla just announced that it has raised a $24 million Series B funding round led by Cathay Innovation, with participation from ZEBOX Ventures — the corporate VC fund of CMA CGM. This funding round comes just a few months after Nabla signed a large-scale partnership with Permanente Medical Group, a division of U.S. healthcare giant Kaiser Permanente.
According to a source, Nabla has reached a valuation of $180 million following today’s funding round. The company could also end up raising more money from U.S. investors as part of this round.
Nabla has been working on an AI copilot for doctors and other medical staff. The best way to describe it is that it’s a silent work partner that sits in the corner of the room, takes notes and writes medical reports for you.
The startup was originally founded by Alexandre Lebrun, Delphine Groll and Martin Raison. Lebrun, Nabla’s CEO, was the CEO of Wit.ai, an AI assistant startup that was acquired by Facebook. He then became the head of engineering of Facebook’s AI research lab FAIR.
A few weeks ago, I saw a live demo of Nabla with a real doctor and a fake patient pretending that they had back pains. When a physician starts a consultation, they hit the start button in Nabla’s interface and forget about their computer.
In addition to the physical examination part, a consultation also includes a long discussion with a bunch of questions about what brings you here and your medical history. At the end of the consultation, there might also be recommendations and prescriptions.
Nabla uses speech-to-text technology to turn the conversation into a written transcript. It works with both in-person consultations and telehealth appointments.
New reports released today by PitchBook-NVCA Venture Monitor and Crunchbase Inc. detail just how grim 2023 was for venture capital funding of startups, both in the U.S. and globally.
The year saw global startup funding plummet to $285 billion, down 38% from 2022, according to Crunchbase. The poor figure highlights a broader trend of reassessment and cautious progression in the market amid ongoing global conflict, macroeconomic concerns and high interest rates. The downturn in funding was across all stages: Early-stage, late-stage and seed funding all saw substantial declines, indicating a pervasive sense of caution among investors.
In the U.S., the scenario was no different from the rest of the world. The country, which traditionally accounts for about half of all venture funding, saw a 37% decline in total funding. The PitchBook report notes a stark decrease in U.S. VC deal activity, with $170.6 billion invested across 15,766 deals, roughly half the amount in 2021.
The European venture scene saw a similar decline in money invested and dealmaking. Despite maintaining high median deal sizes, the continent saw its lowest annual exit value in a decade, further confirming a global VC slowdown.
By exits, the market followed the VC trend, with only $61.5 billion being returned to investors in the U.S. this year, as reported by PitchBook. The decline was particularly noticeable in the tech sector, where large initial public offerings, once a staple of the VC exit strategy, became sparse. The scarcity of public offerings underscored the difficulties faced by unicorns in delivering returns.
Globally, the exit market was similar with one notable exception — Asia, which bucked the trend and saw more than $143 billion in exit value generated over the year, more than the combined values of exits in the U.S. and Europe.
There was also a huge drop in the amount invested into VC funds in 2023. After a record year in 2022, only $66.9 billion was committed to VC funds in the U.S. 2023, the lowest amount since 2017. Globally, the figure was $160 billion, or $200 billion less than in 2021. The lower amounts are noted by PitchBook as likely to hamper a potential rebound in dealmaking in 2024.
The news wasn’t all doom and gloom, however. Certain sectors showing resilience and, in some cases, growth. To the surprise of no one who follows tech, artificial intelligence startups stood out in 2023, raising close to $50 billion, a modest increase from 2022. Conversely, the last “next big thing,” Web3, saw a 73% year-over-year decrease in investment.
The antibody-drug conjugate market remains hot in 2024 with another startup entering the space with an asset and a $100 million Series A raise. OnCusp Therapeutics, a New York City-based biotech, announced Thursday that it is emerging with an ADC candidate and several significant investors including OrbiMed, Novo Holdings, and F-Prime Capital.
Other investors in the round include Sofinnova Investments, Catalio Captial Management, Marshall Wallace, Forge Life Science Partners, Blackbird BioVentures and CJNV BioVenture. OnCusp said that the company has raised $139 million in total since being established in 2021. The company was founded by Bing Yuan, who also serves as CEO, along with Eric Slosberg and Andy Fu.
OnCusp said that the funds will help to expand the team and portfolio and advance its ADC candidate known as CUSP06. The candidate targets the CDH6, comprised of a “high CDH6 binding affinity, a protease-cleavable linker and an eaten payload.” According to its website, CUSP06 is designed to go after solid tumors.
“This significant Series A financing enables OnCusp to accelerate the development of CUSP06 and other game-changing therapeutics in our fight against cancer,” Yuan said in a statement.
OnCusp said that CUSP06 has “strong preclinical data,” can heighten the “bystander effect” and can counter drug resistance. The company secured the FDA’s IND clearance in the third quarter of 2023 and plans to be in a Phase I study in humans soon, though no specific timeframe was given.
“ADCs have become one of the most promising modalities for treating cancer, and CDH6 is emerging as a winning ADC target. We believe CUSP06 is well positioned to unlock the full potential of this target, both in high and low CDH6 expressing tumors,” Diyong Xu, a principal at OrbiMed and board member at OnCusp, said in a statement.
ADCs have been a red hot market in 2023. Major pharma companies such as Pfizer, GSK, and AbbVie — to name a few — have a significant amount of cash into securing assets or acquiring companies to gain access to the technology. The market is showing no signs of slowing as Roche started 2024 with a $50 million upfront, and possibly $1 billion, deal with China-based MediLink to gain access to its ADC in oncology.
LEM Surgical, an innovative surgical robotics company headquartered in Bern, Switzerland, announced the successful completion of its Series B funding, securing €23.6 million. The strongly oversubscribed round reflects the strong investors’ confidence in LEM Surgical’s differentiated approach.
This substantial funding boost is attributed to the enthusiastic participation of new investors from both the United States and Switzerland. The infusion of capital is strategically earmarked to propel the advancement of LEM Surgical’s product development initiatives and readiness for FDA submission in the second half of 2024. With this latest injection of capital, LEM Surgical is well-positioned to achieve its objectives and to further solidify its potential in the field of surgical robotics.
Yossi Bar, founder and CEO of LEM Surgical, said: “Our goal is to revolutionize the experience for surgeons, clinical teams, and hospitals engaged in robotic surgery. We deeply appreciate the trust and support of our new investors. It underscores the unwavering confidence our investors have in the future success of our groundbreaking technology.”
LEM Surgical is at the forefront of shaping the future through the creation of the next generation of robotic surgery platforms. The primary focus of its development efforts is centered around surpassing the capabilities of existing robotic platforms for spine surgery.
The company was founded in 2021 by Prof. Dr. Stefan Weber (CEO, CAScination AG), Marco Matulic (CTO, CAScination AG), Simon Michel (CEO, Ypsomed Group), Prof. Dr. Andreas Raabe (Director, Department of Neurosurgery, Inselspital Bern) and Yossi Bar (previously Director R&D at Mazor Robotics Ltd).
Resalis Therapeutics, an Italian company tackling metabolic disorders with non-coding RNAs, announced the closing of a €10 million Series A financing round led by Sunstone Life Science Ventures with participation from existing investors including Claris Ventures and angel investors. The proceeds will be used to initiate and complete the first-in-human Phase 1 clinical trial and reach Phase 2 readiness for Resalis’ lead program, RES-010, in obesity.
RES-010 is a non-coding RNA-based compound designed to provide a disease-modifying approach in obesity with longer-lasting weight reduction and the ability to extend treatment durability in combination with approved therapeutics, such as GLP-1 receptor agonists. In conjunction with the financing, Claus Andersson, PhD, General Partner of Sunstone Life Science Ventures, will join Resalis’ Board of Directors.
“The successful close of our Series A is an important milestone for Resalis because it will enable us to reach the clinic and to achieve the next significant inflection point with our lead candidate, RES-010. With RES-010 we aim to provide a therapeutic that precisely reduces fat mass in obesity with the potential to extend the durability of existing therapies. We value the trust and support of our new and current investors, and eagerly look forward to this next phase of development,” said Alessandro Toniolo, CEO of Resalis Therapeutics.
Founded in 2021, Resalis has a deep understanding of the field of ncRNAs and RNA-targeted therapeutics in human health and metabolic disorders. The company’s lead candidate, RES-010, is an antisense oligonucleotide that targets miR-22, a central player in the regulation of lipid metabolism and energy consumption. In multiple proof-of-concept studies in large and small animal models, RES-010 has shown the potential to provide a safe and longer-lasting therapeutic effect, alone or in combination with approved drugs. Resalis plans to initiate a Phase 1 clinical study evaluating the safety and efficacy of RES-010 in the first half of 2024. RES-010 is patent-protected in the US, Japan and China with patents pending in the EU.
“Resalis’ therapeutic approach is based on groundbreaking science that has rapidly led to the development of a lead candidate, now on the cusp of clinical evaluation. Preserving muscle mass is key to provide a sustained and meaningful clinical benefit, and we share the team’s vision that this non-GLP1/GIP therapeutic will significantly improve both effect and tolerability of today’s therapies. This investment underscores our belief in the company’s vision and the transformative potential of its lead candidate to make a meaningful impact for obese patients,” commented Claus Andersson, General Partner at Sunstone Life Science Ventures.
Pietro Puglisi, Managing Partner at Claris Ventures and Chairman of the Board at Resalis Therapeutics, added: “In recent years, there has been remarkable progress in the treatment of metabolic disorders. Yet, there persists a critical need for innovative solutions that can both provide orthogonal therapeutic effects and pave the way for combination therapies. I look forward to the continued collaboration with the outstanding Resalis team and welcoming Claus as a new member of the Resalis Board.”
energyRe, an independent U.S. clean energy developer, has raised a $1.2 billion capital package to support the expansion of its large-scale renewable energy portfolio comprising utility-scale transmission and storage, onshore wind and solar generation, and offshore wind.
The package includes committed capital investments in energyRe LLC from Glentra Capital alongside co-investors Novo Holdings and Denmark-based pension fund PKA. Glentra will leverage its experience in developing and constructing renewable energy assets in the U.S. to support the energyRe team in expanding its development pipeline and delivering on its growth plan.
In addition, a firm agreement has been reached with Elia Group for the acquisition of a stake in a subsidiary of energyRe: energyRe Giga. The European transmission specialist will be offering its experience in the development, construction, operation and maintenance of offshore transmission infrastructure; HVDC technology; transmission planning; and congestion management to the partnership. The capital package also includes a mandated corporate debt facility to be arranged by Santander and Deutsche Bank.
energyRe’s diversified portfolio of renewable assets includes a development pipeline spanning 17 states and comprises more than 500 miles of high-voltage direct current (HVDC) transmission; 10.5 GW of solar, wind, and storage; and more than 155 MW of distributed generation.
“Through this agreement, Elia Group (via WindGrid USA) is entering the U.S. markets alongside an established partner with a solid portfolio of projects. This partnership with energyRe Giga is part of Elia Group’s growth strategy in Europe and the United States, since the group is focused on expanding its activities abroad and strengthening the development of sustainable energy solutions,” said Catherine Vandenborre, Interim CEO of Elia Group.
energyRe is advancing several renewable energy projects across the United States. It is a partner on Clean Path NY — a public-private collaboration to develop 3,800 MW of new wind and solar power and a 175-mile, underground 1,300 MW HVDC transmission line. Clean Path NY is meant to advance New York State’s Climate Leadership and Community Protection Act, which mandates a zero-emission electricity sector by 2040, 70 percent renewable energy generation by 2030, and economy-wide carbon neutrality. Upon operation, Clean Path NY will purport to deliver more than 7.5 million MWh of emissions-free energy annually and reduce fossil fuel-fired electric generation in New York by 22% per year on average.
energyRe is also a development partner on the SOO Green HVDC Link — a 350-mile interregional transmission line that will connect the midwestern (MISO) and eastern (PJM) power markets and enable the delivery of 2,100 MW of renewable energy — enough to power more than 1.5 million homes. By delivering wind and solar power to the nation’s largest electricity market, SOO Green will significantly decarbonize the regional electric grid and enhance system reliability and resiliency.
energyRe is an affiliate of Related Companies, a prominent real estate company in the United States and a creator and preservationist of affordable housing.
As demand for generative AI in the legal sector explodes, Robin AI, an AI-powered legal copilot, announced that it has raised €24 million in new funding. The Series B round is led by Temasek, a global investment company headquartered in Singapore. Other investors include QuantumLight, Plural and AFG Partners.
The funding will allow Robin AI to capitalise on the strong momentum it is seeing in a very fast moving market. This includes expanding its team on the ground in the US where three quarters of its revenue is already derived from; as well as opening an office in Singapore to expand into Asia Pacific. The investment will also be used to expand its existing team of AI and machine learning experts.
Robin AI was founded in 2019 by Richard Robinson, a lawyer at Clifford Chance, and James Clough, a machine learning research scientist at Imperial College. It leverages the power of generative AI to automate and speed up the process of drafting and negotiating contracts, as well as extracting information from across entire contract repositories through simple search. Its legal copilot, available as a Microsoft Word add-in, can cut the time it takes to review contracts by 85%, allowing businesses’ legal teams to move faster, save money and ultimately invest their time more strategically.
CEO and co-founder Richard Robinson, who has relocated to New York to support the US expansion, said: “We’ve seen incredible customer traction with what we believe is the smartest AI contract copilot on the market. But this is just the beginning. We are building the AI platform for the legal sector — a service that deeply understands every aspect of the legal function, from drafting contracts, researching case law to explaining legal concepts — our AI will help people tackle every legal task. This will help level the playing field between big and small law firms and help more people access legal services. This investment will help us to realise this vision.”
Robin AI places quality and accuracy at the heart of its approach. Earlier this year, it became one of Anthropic’s launch partners for the release of their Large Language Model (LLM), Claude — the only such partner applying this technology to legal work. Claude 2.1 allows much longer prompts than other LLMs (around 150,000 words in each prompt), a key benefit for analysing long and complex legal documents. Anthropic is also dedicated to building frontier AI models that are safe and reliable.
Carina Namih, Partner at Plural, commented: “Everyone is wondering how AI lands usefully. Robin is delivering AI products to an astonishing volume and range of customers — serious businesses across sectors that are using it today to transform how they work. And they’ve only scratched the surface. I have backed this team since inception and couldn’t be more bullish about their ability to win the global legal market.”
