In 2021, Roi Ravhon, Asaf Liveanu and Yizhar Gilboa came together to found Finout, an enterprise-focused toolset to help manage and optimize cloud costs. (We covered the company’s launch out of stealth in 2022.) Ravhon, Finout’s CEO and previously the director of engineering at observability platform Logz.io, says that he was spurred to start Finout […]
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Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.
© 2024 TechCrunch. All rights reserved. For personal use only.
Razer is in trouble with the FTC over masks it made and sold during the COVID pandemic. The matter is going to cost it around $1.1 million, and some bad press.
Yeah, masks. Not what comes to mind when you think of the word “Razer,” right? You probably associate the brand with gaming keyboards and mice. Heck, I have a Razer mouse plugged into my work computer right now. It’s great. But the company’s masks were not, and that’s a problem.
Not getting its putatively N95 masks properly tested and vetted has landed Razer in trouble with authorities, but the entire saga got us thinking. In an era when we’re seeing buggy electric cars, AI handsets and pins that don’t quite live up to expectations, and even masks that don’t quite mask as promised, are we living in an era of half-baked hardware?
Thinking about this, I wonder if an issue at play is that folks who are pushing the boundaries of what we can build, and how quickly, are applying software strategies — MVPs, quick iterations, etc — to hardware, and it’s not quite converting. The good news is that Razer gaming hardware is still pretty good, even if I suspect the company today regrets digging into the mask space. Hit play, let’s have some fun!
Developers have a problem. It used to be the case that only large enterprises needed to worry themselves with security, but today, every startup is capable of holding huge amounts of customer data. That means developers across the board have to worry about how secure their platform is, and they often find themselves grappling with complicated tools to manage security.
Now, Aikido, a small startup in Ghent, Belgium, thinks it has an answer to that dilemma: A no-nonsense, open-source, developer-facing security platform. And the startup has just raised a $17 million Series A to further build out its product.
“There have been security tools for three decades, but I think we’re the first where the buyer is the user. With other tools, the CSO is the buyer, but then some poor developer is the user. We are the ‘no BS’ platform,” Aikido’s founder and CTO, Willem Delbare, told TechCrunch.
He has a point.
Aikido’s main competitors tend to make tools that are aimed at larger enterprises than the people who actually have to deploy the tools. Enterprise platform Snyk, for example, used to resemble Aikido, but pivoted to larger firms some time ago. Other competitors include JIT, which caters to small-to-mid market customers. In the middle market, you have Endor Labs, Guardrails, and then you have larger companies like Mend, Qwiet, Oxeye, Ox, Arnica and Apiiro .
Delbare told me that Aikido’s main differentiators are that it has a freemium model and it actively open-sources new products. “This makes us flexible, fast, and affordable,” he said.
The company also offers all-in-one security, flat pricing, and a lot less notifications. “We only bother developers when something ‘real’ is wrong. We aggressively triage alerts to cut noise and false-positives,” he said.
That logic seems to have worked fairly well: The company already has 3,000 small-to-midsize customers. And this Series A, led by European venture firm Singular, comes less than 6 months after the company raised a $5 million seed round. The company has now raised a total of $22.5 million.
Another aspect that sets Aikido apart is that it’s based in Ghent. The security industry is dominated by Israeli and U.S. incumbents, and their veterans (the security industry’s version of the ‘PayPal Mafia’ is called ‘the Checkpoint Mafia‘).
Delbare said there’s a certain “playbook” that U.S. or Israeli security startups follow: “They take a very technically advanced security feature, become really good at it, raise a ton of cash, and then two years later, get bought by Palo Alto Networks or Cisco. And then they just repeat that playbook over and over.”
He stressed that Aikido doesn’t follow that pattern. “We’re not doing that kind of playbook. We’re not one single feature. If we ever get bought, it will just be for our customer base and the revenue. Not for a platform that fixes a feature gap,” he said.
“These tools basically look like the inside of an F-16’s cockpit. They make you feel dumb. A developer just wants to fix problems and move on with building fun features, right?” Delbare explained.
Delbare said Aikido decided to go with Singular after meeting its partner, Henri Tilloy. “I think he’s the first VC I’ve talked to in a long time who actually understood the product. Most VCs look at your company and they just see a spreadsheet,” he said.
Also in the team are co-founders Roeland Delrue (CRO and COO), and Felix Garriau (CMO). The company has brought on Madeline Lawrence, who left her role as a partner at Peak VC to join the startup as its chief brand officer.
The round also saw participation from Notion Capital and Connect Ventures, both of which co-led the previous seed round.
Aikido is tackling a large market. The network security software market is expected to increase from $24.21 billion in 2023 to $27.33 billion in 2024.
At the same time, security risks are mutating and growing rapidly, with the average cost of a data breach reaching record highs of $4.45 million in 2023, according to Upguard.
Pomelo, a startup that combines international money transfer with credit, has raised $35 million in a Series A round led by Dubai venture firm Vy Capital, TechCrunch has exclusively learned. Additionally, the company is announcing a $75 million expansion of its warehouse facility.
Founders Fund and A* Capital also participated in the financing, along with early investor Afore Capital, and others.
The deal brings total funds raised to date to $55 million in equity capital and $125 million for its warehouse facility. TechCrunch covered Pomelo’s Founders Fund-led $20 million seed funding in 2022.
New backer Vy Capital is an under-the-radar investment firm that has grown to over $5 billion in assets and made headlines for backing Elon Musk in his purchase of Twitter.
Pomelo’s new round was among Keith Rabois’ last deals before recently leaving Founders Fund for Khosla Ventures, and he continues to sit on its board.
“Both Keith Rabois and Kevin Hartz went super pro rata on this round,” Pomelo founder and CEO Eric Velasquez Frenkiel said in an interview with TechCrunch, describing the Series A round as “preemptive.” He declined to reveal valuation, saying only it was an “up round.”
Hartz serves as the co-founder and general partner at A*. Previously, he also co-founded Eventbrite and Xoom, an online money transfer service that went public in 2013 and was acquired by PayPal for $1.1 billion in 2015.
In a written statement, Rabois said that “Pomelo stands out through a fundamentally different approach to remittance transfer by using credit as its foundation.”
Pomelo launched in the Philippines in 2022, allowing people in the United States to send money to the country while at the same time building their credit. In other words, Pomelo has built a remittance product on credit card rails.
Specifically, the startup has struck up an agreement with Mastercard to create what it describes as a product category called “Send Now, Pay Later” (SNPL), which it claims is “faster and with no transfer fees” as compared to traditional cross-border money movement.
Image Credits: Pomelo
Pomelo works by allowing a user to set up an account that comes with credit cards. The creator of the account can set limits, pause cards and view spending habits.
Senders can give cash, in the form of credit, to family members — which the startup thinks will help with instant access to funds, fraud and chargeback protection and, for potential immigrants that may use this to send money back home, a way to boost one’s credit score with more transaction history. In the event that someone cannot pay, Pomelo charges a late fee, “so there is no interest on the product,” Frenkiel said. The company makes money mostly through interchange revenue, and foreign exchange is a smaller component.
Since its 2022 launch, Pomelo has added new payment options including most recently, the ability for users to send funds to GCash, a popular e-wallet (similar to Venmo in the U.S.) in the Philippines, in addition to cards. (According to a recent article by STL Partners, 67% of Filipinos use GCash.)
This ability is particularly important in a country like the Philippines where proof of ability to pay can be required before medical treatment, Frenkiel said. He relates the story of customer Danette Flores, a nurse who sends money to two family members in the Philippines with Pomelo.
“My mom had suffered a heart attack, and she needed to be transferred to the ICU, but the hospital required proof of payment for that. My brother used his Pomelo Card to get her admitted,” Flores said.
Pomelo offers customers two options: either an unsecured credit line or a secured credit line based on its underwriting criteria at this time. The non-revolving credit line for unsecured customers gives them the ability to transfer up to $1,000 a month. On the secured side, a customer can put in a security deposit. In other words, Pomelo can hold funds in the app that effectively can be used to open a credit line.
The startup’s new capital will go toward product and market expansion. Pomelo’s next target country is Mexico.
“Mexico is certainly the largest corridor for the United States — something close to $40 billion is sent over to Mexico every year,” Frenkiel said.
Presently, Pomelo has 55 employees in the U.S. and Philippines.
As Christine Hall recently reported, cross-border fintech is hot right now. The cross-border payments market is forecasted to reach over $250 trillion by 2027, according to the Bank of England. And experts say fintechs are giving banks a run for their money (pun intended) here, especially in the business-to-business sector where artificial intelligence, machine learning and blockchain come into play — all emerging technologies fintechs love.
But there are other startups focused on the consumer market, including Alza, a startup aimed at helping meet the various banking needs of Latin or Central Americans who have moved to the U.S. With Alza, users get an FDIC-insured checking account and debit card. They also get the ability to send cross-border remittances to more than 20 countries in Latin or Central America embedded in its app via three methods, depending on the recipient country: bank transfer, cash pickup or transfer to a debit card. That company quietly raised $6.6 million in a round led by New York-based Thrive Capital in late 2021.
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The funding climate for AI chip startups, once as sunny as a mid-July day, is beginning to cloud over as Nvidia asserts its dominance.
According to a recent report, U.S. chip firms raised just $881 million from January 2023 to September 2023 — down from $1.79 billion in the first three quarters of 2022. AI chip company Mythic ran out of cash in 2022 and was nearly forced to halt operations, while Graphcore, a once-well-capitalized rival, now faces mounting losses.
But one startup appears to have found success in the ultra-competitive — and increasingly crowded — AI chip space.
Hailo, co-founded in 2017 by Orr Danon and Avi Baum, previously CTO for wireless connectivity at the microprocessor outfit Texas Instruments, designs specialized chips to run AI workloads on edge devices. Hailo’s chips execute AI tasks with lower memory usage and power consumption than a typical processor, making them a strong candidate for compact, offline and battery-powered devices such as cars, smart cameras and robotics.
“I co-founded Hailo with the mission to make high-performance AI available at scale outside the realm of data centers,” Danon told TechCrunch. “Our processors are used for tasks such as object detection, semantic segmentation and so on, as well as for AI-powered image and video enhancement. More recently, they’ve been used to run large language models (LLMs) on edge devices including personal computers, infotainment electronic control units and more.”
Many AI chip startups have yet to land one major contract, let alone dozens or hundreds. But Hailo has over 300 customers today, Danon claims, in industries such as automotive, security, retail, industrial automation, medical devices and defense.
In a bet on Hailo’s future prospects, a cohort of financial backers, including Israeli businessman Alfred Akirov, automotive importer Delek Motors and the VC platform OurCrowd invested $120 million in Hailo this week, an extension to the company’s Series C. Danon said that the new capital will “enable Hailo to leverage all opportunities in the pipeline” while “setting the stage for long-term growth.”
“We’re strategically positioned to bring AI to edge devices in ways that will significantly expand the reach and impact of this remarkable new technology,” Danon said.
Now, you might be wondering, does a startup like Hailo really stand a chance against chip giants like Nvidia, and to a lesser extent Arm, Intel and AMD? One expert, Christos Kozyrakis, Stanford professor of electrical engineering and computer science, thinks so — he believes accelerator chips like Hailo’s will become “absolutely necessary” as AI proliferates.
Image Credits: Hailo
“The energy efficiency gap between CPUs and accelerators is too large to ignore,” Kozyrakis told TechCrunch. “You use the accelerators for efficiency with key tasks (e.g. AI) and have a processor or two on the side for programmability.”
Kozyrakis does see longevity presenting a challenge to Hailo’s leadership — for example, if the AI model architectures its chips are designed to run efficiently fall out of vogue. Software support, too, could be an issue, Kozyrakis says, if a critical mass of developers aren’t willing to learn to use the tooling built around Hailo’s chips.
“Most of the challenges where it concerns custom chips are in the software ecosystem,” Kozyrakis said. “This is where Nvidia, for instance, has a huge advantage over other companies in AI, as they’ve been investing in software for their architectures for 15-plus years.”
But, with $340 million in the bank and a workforce numbering around 250, Danon’s feeling confident about Hailo’s path forward — at least in the short term. He sees the startup’s technology addressing many of the challenges companies encounter with cloud-based AI inference, particularly latency, cost and scalability.
“Traditional AI models rely on cloud-based infrastructure, often suffering from latency issues and other challenges,” Danon said. “They’re incapable of real-time insights and alerts, and their dependency on networks jeopardizes reliability and integration with the cloud, which poses data privacy concerns. Hailo is addressing these challenges by offering solutions that operate independently of the cloud, thus making them able to handle much higher amounts of AI processing.”
Curious for Danon’s perspective, I asked about generative AI and its heavy dependence on the cloud and remote data centers. Surely, Hailo sees the current top-down, cloud-centric model (e.g. OpenAI’s modus operandi) is an existential threat?
Danon said that, on the contrary, generative AI is driving new demand for Hailo’s hardware.
“In recent years, we’ve seen a surge in demand for edge AI applications in most industries ranging from airport security to food packaging,” he said. “The new surge in generative AI is further boosting this demand, as we’re seeing requests to process LLMs locally by customers not only in the compute and automotive industries, but also in industrial automation, security and others.”
How about that.
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